The US government has shown its more generous side recently by announcing that every American will receive a $1,200 stimulus check to help see them through the COVID-19 fallout. As always, Americans have begun flooding the internet with ways they plan on spending their stimulus check, with some being rather innovative.
However, one trend that’s starting to emerge is that of spending the entire check on Bitcoin and other cryptos. While in the long-run, that’s actually one of the smartest decisions that you can make, in the short-term, it could leave many people without the means to live.
Instant Cash, Instant Bitcoin
Thanks to the marvelous advance of mass adoption over the years, buying Bitcoin has never been easier. There are dozens of mobile apps that allow you to swap your dollars for Bitcoin in a matter of seconds, but unfortunately not everyone is quite ready for this level of adoption.
With Bitcoin approaching its third halving, volatility is at its peak. Markets are experiencing wild swings in price in a matter of seconds. For the experienced trader, this is a golden opportunity to make some quick cash and turn that $1,200 stimulus check into a few grand rather quickly.
On the other side of the dice, we’ve got the newcomers to the crypto space. These are the people that really should avoid dropping their entire stimulus check into Bitcoin.
Simply put, newcomers tend to be afraid of the dips and sell at inopportune moments, racking up hefty losses. When Bitcoin is this volatile, it’s not advised for newcomers to Bitcoin to start entering the markets.
In fact, Bitcoin casinos and sportsbooks have also noticed a nice uptick in business, meaning that a lot of these stimulus check Bitcoin buys are in fact helping people get access to the very best Bitcoin casinos and place wagers on popular markets that traditional bookies might not have access to.
There’s a Real Danger
For those that are out of work and have little to no savings, there is a real danger that by risking this entire stimulus check on Bitcoin, people could be left to starve or rely on the goodwill of others. As seasoned traders know only too well, Bitcoin can be a harsh mistress when you’ve gone all in.
In fact, Brian Armstrong, Coinbase co-founder and CEO, noted on his Twitter account that the number of deposits/buy orders that are worth exactly $1,200 has skyrocketed in the past few days, hinting that millions of people are using this stimulus check to buy Bitcoin.
A Good Idea, But a Risky One
It’s without a doubt that in order to fund this huge program, the US government has been forced to print a whole lot of USD, a rather neat feature that Bitcoin’s inventor, Satoshi Nakamoto, removed from the Bitcoin code.
This means that inflation is seeping into the US economy, and by buying Bitcoin, Americans are hedging their bets against the USD in digital gold.
This is a brilliant idea for the long term, as the more stimulus packages the US government dishes out, the more inflation will rise. Couple this in with unemployment stats at their worst since the great depression, there’s a real risk the US economy could take a big hit – dragging the dollar down with it.
So, for those Americans that are taking the plunge, we can only recommend that you hodl on and weather the storm. If you can afford to go without the stimulus check, buying Bitcoin is a great idea if you plan to hold it for a few years.
On the other hand, if you’re struggling day to day when it comes to bills and food, avoid buying Bitcoin at all costs. Bitcoin can be a harsh mistress, so don’t risk food over short-term gains.
If you’re going to gamble with your stimulus check, it might be worth buying that Bitcoin and heading to one of the best Bitcoin casinos – you’ve certainly got a better chance of winning big!
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