- The US has started rolling out coronavirus stimulus checks.
- Some people are spending it on Bitcoin.
- Bitcoin's price has jumped up $500 today.
Coronavirus stimulus checks are finally arriving and along with them come stories of frivolous—and not so frivolous—purchases of tigers, guns, and of course, Bitcoin.
Just under a month ago, the US government struck a deal on a $2 trillion stimulus package to curb the coronavirus crisis. The package set aside $1,200 for every lower/middle-income American adult, and the first batches have arrived. So what have Americans been spending their government money on?
One wanted to live the 'Tiger King' out as a reality. "Who wants to combine their stimulus checks with me, and we can buy a tiger," wrote one Netflix binger.
Others went straight for the guns. "Waiting for my stimulus check so I can use it to buy a gun to protect myself against a tyrannical government if need be," tweeted a prospective gunslinger.
But most opted for Bitcoin.
Banking on Bitcoin
Swarms of crypto evangelists are lauding the benefits of buying Bitcoin with the stimulus checks. For many, the US' recent decision to print money at a rate of $1 million per second, will only weaken the US Dollar. Chuck the check directly into Bitcoin, however, and you have yourself a direct hedge against inflation—or so the argument goes.
"It's the equivalent of climbing into a lifeboat if you were on the Titanic," an attorney known only as Jared on Twitter, told Decrypt.
"The USD ship is sinking. Maybe it won't go under this year, but printing infinite money isn't sustainable." he explained, "BTC is a lifeboat that can protect your savings. Because every dollar the Treasury creates decreases the purchasing power of all other dollars in circulation."
Twitter user and fervent Bitcoin bull—known pseudonymously as Fab00se—gave another, more pressing reason for trading the stimulus for bitcoin.
"The funds technically can be reutilized by banks if funds sit in your account," he told Decrypt.
He pointed to Congress's omission in exempting stimulus aid within private debt collection. The result is that banks can legally appropriate funds to offset long-held debts rather than pass it on to the person set to receive it.
Pragmatism aside, he alluded that he would have probably stuck the funds in Bitcoin regardless.
"It's 'free money' I didn't apply for it or anything. Just showed up. I rather own more Bitcoin than a fiat printing to infinity, he said.
Some have more altruistic plans. Nate Talbot, executive director of non-profit Detroit Blockchain Center, told Decrypt that he plans to buy Bitcoin with the money. And this means his check will go to those who need it.
"I've been preparing for an economic downturn for years. I don't need the stimulus. A lot of crypto people don't. But even more people do need it,” Talbot said.
"When you buy crypto in downturns, you're buying it mostly from regular people, not institutions. It's a win/win scenario that helps the whole global economy. I send them my stimulus check because they need it more than I do. They send me some bitcoin," he added.
Bitcoin price bounces up
While Bitcoiners have been rushing to buy Bitcoin with stimulus money, the price of Bitcoin has gone up. In the last day, Bitcoin's price has risen $500.
"Govt begins the distribution of stimulus checks and #Bitcoin pumps back to $7k! #Bullish," wrote crypto exchange BTSE co-founder Brian B, who also keeps his surname private.
Like most gains in the Bitcoin market, it's likely speculation driving the rally rather than the stimulus itself. Still, with US Democrats proposing to pay Americans $2,000 a month—and the US Federal Reserve’s balance sheet rising 50% to break $6 trillion—it’s unsurprising that even Bitcoin critics like Mark Cuban are suggesting that conditions are starting to favor Bitcoin. But he hasn’t bought back his Bitcoin—yet.