The COVID-19 pandemic hit businesses and consumers with job cuts, layoffs and business closings. The impact continues to be felt today with higher inflation and a tight job market coming after the pandemic.
To help mitigate the impact of the pandemic, the U.S. government sent out several stimulus payments to help individuals and families deal with rising costs and job losses.
While the stimulus payments were meant to help with everyday spending and bills, Americans who received the payments were free to do with the money as they wished, potentially investing it if they did not need the money at the current time or putting it into savings.
What Happened: In 2020, the Coronavirus Aid, Relief and Economic Act (CARES Act) was signed into law. Under the law, Americans received a total of three stimulus payments.
Many used the money for bills and savings, but some also turned to investing in stocks and cryptocurrencies at the time.
The CARES Act paid out $1,200 to eligible adults and $500 more for those with qualifying children for its first stimulus payment.
The subsequent Tax Relief Act of 2020 paid out an additional $600 per eligible adult and up to $600 more for those with qualifying children in December 2020. The American Rescue Act of 2021 provided an additional $1,400 payment to eligible adults and up to $1,400 for those with qualifying children.
Here’s a look at the return a consumer would have if they put their stimulus checks ($1,200, $600 and $1,400) into leading cryptocurrencies like Bitcoin BTC/USD, Dogecoin DOGE/USD and Ethereum ETH/USD.
The hypothetical results are based on the dates of April 11, 2020; Dec. 29, 2020; and March 12, 2021, for the stimulus checks.
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Stimulus Checks in Bitcoin: Investing in Bitcoin with a portion of the stimulus checks may have been a popular option for investors and people looking to store some of the payment away or get involved in the cryptocurrency market for the first time.
Bitcoin traded at $6,926 on April 11, 2020, $27,370 on Dec. 29, 2020, and $57,996 on March 12, 2021. A person who put all $3,200 from the stimulus checks into Bitcoin would have been able to purchase a total of 0.219 BTC.
Based on a price of $46,975.28 for Bitcoin today, that $3,200 would now be worth $10,287.59, gaining 221.5%.
Stimulus Checks in Dogecoin: The meme cryptocurrency known as Dogecoin gained interest and value in 2021 thanks to retail investors and vocal public supporters like Mark Cuban and Tesla CEO Elon Musk. Here's how stimulus checks in Dogecoin would have fared.
Dogecoin traded at $0.0020 on April 11, 2020, $0.0046 on Dec. 29, 2020, and $0.0570 on March 12, 2021. A person who put all $3,200 from the stimulus checks into Dogecoin would have been able to purchase 754,996 DOGE. Based on a price of $0.08107 today, that $3,200 would now be worth $61,207.53, gaining 1,812.7%.
Stimulus Checks In Ethereum: One of the fastest-growing cryptocurrencies in 2021 was Ethereum, thanks to its connection to non-fungible tokens. Here's a look at how stimulus checks invested in the second-largest cryptocurrency would have fared.
Ethereum traded at $161.17 on April 11, 2020, $737.95 on Dec. 29, 2020, and $1,839.50 on March 12, 2021. A person who put the $3,200 into Ethereum would have been able to purchase 9.02 ETH. Based on a price of $2,353.96 for Ethereum today, that $3,200 investment would now be worth $21,232.72 today, gaining 626.0%.
Stimulus Check In All 3 Cryptocurrencies: A more diversified approach from an investor could have seen investments in Bitcoin, Dogecoin and Ethereum. Splitting the $3,200 into equal investments of the three cryptocurrencies on the respective stimulus payout days would have given an investor 0.0731 BTC, 251,665 DOGE and 3 ETH. The three cryptocurrencies would be worth $20,898.25 today based on equal investments from the three stimulus checks.
This represents a return of 865.8% for investing the stimulus checks in the three cryptocurrencies.
Photo: Unsplash
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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