USA: What the new helicopter money means for the crypto space
The third wave of stimulus checks is set to provide the US with $400 billion. What does the new helicopter money mean for the crypto space?
The third round of stimulus check disbursements has begun in the US. This is according to a letter from the Internal Revenue Service (IRS). According to the letter, the US tax authority Immediate Edge has been transferring the helicopter money to citizens‘ accounts since the weekend. Specifically, taxpayers are to receive up to 1,400 US dollars. In addition, up to another 1,400 US dollars will be paid for each qualified dependent declared on the tax return. The income and the number of dependents are decisive for the amount of aid.
The total volume of Corona aid under President Biden amounts to about 1.9 trillion US dollars. The current, third distribution is estimated to amount to about 400 billion. The money is intended to help US citizens pay their bills. Since the helicopter money has been in circulation, however, a somewhat different purpose has emerged. Some citizens simply invested the money in stock or crypto markets. The best example of this is probably the GameStop stock pump.
There were already signs of this phenomenon a year ago. When the Trump administration issued the first „stimulus checks“ in the amount of 1,200 US dollars, Coinbase, for example, observed that the number of transactions, which exactly corresponded to the volume of the stimulus checks, had increased.
Helicopter money could flush fresh liquidity into the crypto space
Based on past examples, the current helicopter money could provide for new movements in the crypto market, as not every citizen necessarily has to rely on the aid. So this time, too, some Americans could use the funds to „gamble“. How much of the intended 400 billion will find its way to Bitcoin and Co. is unclear. If only a quarter of the cheques were invested, this would already correspond to almost eight times the daily real trading volume of bitcoin (as of 15 March 2021).
How exactly this mind game will actually affect the prices of cryptocurrencies remains to be seen. Crypto-YouTuber Anthony „Pomp“ Pompliano at least thinks that the stimulus checks could well lift the Bitcoin price to 100,000 US dollars. He was euphoric on Twitter and thanked the president.