Cryptocurrencies' Analysis 17-MAR-21
According to Mizuho Securities, about $40 billion of the 380, or more than 10%, that will be transferred to US citizens in the form of incentive payments, can be used to invest in bitcoin and stocks. The Mizuho team surveyed 235 people with a family income of less than $150,000 a year. It is estimated that this could add 2-3% to bitcoin's current $1.1 trillion market cap.
As noted by Goldman Sachs, a significant part of the new payments, which will soon be sent to American households, may hit the stock market. The forecast for demand for household net worth has been raised from $100 billion to $350 billion, reflecting faster economic growth and higher interest rates than previously thought, as well as additional incentive payments to individuals and increased retail activity in early 2021.
According to JPMorgan, in the first quarter of 2021, the volume of retail investment in bitcoin exceeded the investment of institutional investors, who began to buy less cryptocurrency. The decline in institutional investment may be one of the reasons why Bitcoin has failed to hold above $60,000. Nevertheless, all attention is focused on the growth of retail investment, especially given the new round of direct payments to US citizens as part of the economic stimulus. JPMorgan estimates that retail investors purchased more than 187,000 bitcoins in the first quarter, about 10% more than institutional investors. Institutions were much more active last quarter. But now the volumes of the two investment sectors in bitcoin have become comparable.