The US Federal Government is in the process of sending helicopter money around the country. Individuals may receive $1400. Families could receive more. The stimulus money (or stimy) phases out as incomes go higher. So what will Americans do with this windfall money?
A recent Harris Poll indicates that about 15% of the previous two stimulus checks invested the money. About 7% specifically invested in crypto like Bitcoin or Ethereum.
Harris states that the majority of Americans report that household finances have been unchanged by the COVID-19 health crises. But almost a third (29%) report that things have gotten worse.
Harris reports that individuals who received the first federal stimulus payment issued in March 2020, most spent the money on necessities like rent or groceries (43%), put the money in savings (36%), or paid down debt (32%).
This trend remained for the second round of stimulus checks as Americans used the money to pay for necessities (43%), put money in their savings (33%), or pay down debt (30%).
Cryptocurrency investments held steady at 7% while non-crypto investments (e.g., stocks, bonds, commodities) rose slightly to 10%.
Two-thirds (67%) of Americans say they expect to receive a stimulus payment from the pandemic relief bill that Congress just passed this month, and 62% say they feel they need the money to be able to cover the cost of necessities like household bills, groceries, and medicine.
Harris adds that a large plurality plan to put at least some of the money into their savings (40%) or invest the funds (17%). Of those who plan to invest money from the new stimulus check, 41% plan to invest in cryptocurrencies.
Digging a bit deeper, Harris says that higher income households intend to invest the money.
Compared to just 3% of individuals in households making less than $50,000/year, 10% of individuals in households making more than $100,000/year invested in cryptocurrencies using the first stimulus check. Slightly more (13%) did the same with the second stimulus check, and 14% plan to do the same, assuming they receive the next stimulus check.
During the year of COVID, high annual income households ($100K+) have also increased their overall investing with stimulus checks compared to their lower-income counterparts (<$50K) (24% vs. 5%, respectively for the March 2020 stimulus; 28% vs. 6%, respectively for the January 2021 stimulus; and 31% vs. 13%, respectively for the upcoming stimulus).
Harris also shares that throughout the pandemic around one in ten recipients have used their stimulus payments to offer financial help to friends or family (9%), and 12% plan to do the same using the new stimulus check.
In fact, nearly one in five individuals in higher annual income households ($100K+) have done this throughout the pandemic — 16% using the March 2020 stimulus and 15% using the January 2021 stimulus — and plan to do so at a higher rate assuming they receive the next stimulus check (19%).
As for actually stimulating the economy, Harris states that 10% of Americans who received the first stimulus check spent some or all of the money on non-necessities, 13% did the same with the second stimulus check. Currently, 16% of those who expect to receive a stimulus plan to spend part or all of the money on non-essentials.
Of course, we may know more in the coming weeks but the US government may be inadvertently boosting crypto markets which may not be a bad thing.