Bitcoin (CRYPTO: BTC) has surged in value in recent days, topping the $122,000 level and narrowing in on all-time highs set in August. Investor Anthony Pompliano recently used a statistic about investing stimulus checks into Bitcoin to illustrate the changing valuation and declining value of the dollar.
How is BTC doing today? See here.
Pompliano on Bitcoin Investments
Benzinga previously shared that investing stimulus checks into Bitcoin, Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) turned into nice returns for consumers who did not need the money for groceries, bills or other necessities during the COVID-19 pandemic.
In a video, Pompliano shared a stat on how much investing the first stimulus check of $1,200 into Bitcoin would be worth.
"I saw this stat and it blew my mind," Pompliano said.
Pompliano said the huge return from investing in Bitcoin shows the difference between investing and spending.
"This is ultimately the example of what's happening in society. We have a K-shaped economy, investors are winning and consumers are losing."
Pompliano said that while this may not be fair, it means that people need to learn to be investors.
The people who became investors instead of consuming were rewarded and turned their stimulus money into a hard asset like Bitcoin, Pompliano added.
"If you didn't do that, you're on the losing side of the trade."
Read Also: Bitcoin Hits $120,000 As JPMorgan Lifts Year-End Target To $165,000
Stimulus Checks to Consumers
The U.S. government gave out several stimulus payments during the height of the COVID-19 pandemic to help individuals and families deal with rising costs and job losses.
Those who received the stimulus checks were free to do with the money as they wished, including potentially investing it if they did not need the money for bills or savings.
In 2020, the Coronavirus Aid, Relief and Economic Act (CARES Act) was signed into law. Under the law, Americans received three rounds of stimulus payments. While some used the money for bills and to boost their savings, others chose to invest in stocks and cryptocurrencies.
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, Dogecoin and Ethereum, based on the dates of April 11, 2020, December 29, 2020, and March 12, 2021.
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 from the U.S. government.
Bitcoin traded at $6,926 on April 11, 2020, $27,370 on December 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 0.2366 BTC.
Based on a price of $122,558.80 for Bitcoin today, that $3,200 would now be worth $28,997.41.
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 December 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 $0.2595 today, that $3,200 would now be worth $195,921.46
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 December 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 $4,520.82 for Ethereum today, that $3,200 investment would now be worth $40,777.80 today.
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 $87,828.58 today based on equal investments from the three stimulus checks.
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This article was previously published by Benzinga and has been updated.
Photo: 24-K Production via Shutterstock
