People Are Using Stimulus Checks To Buy Bitcoin

Tracking what the US government’s $1200 stimulus check would now be worth if used to buy #bitcoin on April 15, 2020. Created by

Updated: 1-5-2021

Stocks, Bitcoin And More: Unusual Ways Americans Are Planning To Use Their $600 ‘Stimmy’

Some stimulus check recipients are considering investing their money or treating themselves after a tough 2020.

Stimulus checks will provide a financial lifeline to millions of Americans, as they reel from the economic devastation brought on by the Covid-19 pandemic.

But some recipients have kept their jobs and income, and are able to cover critical monthly expenses such as rent, utility bills and debt payments. For them, the $600 checks represent an opportunity to boost their savings, spend on non-essential goods or buy stocks.

On TikTok, where young investors have turned for investment advice, videos on how to turn your “stimmy” into thousands of dollars are making the rounds.

Albert Lewis III, a 19-year-old Iowa State University student who grew up in Chicago, has already decided where the money is going: into his Robinhood investment account.

“The $600 isn’t needed at this moment,” Lewis said. “I’m investing it hopefully to turn it into something more than that by the time I’ll need it. $600 in a year isn’t going to turn into $10,000, but if I invest it now, in 40 years it’s going to be worth way more.”

He says most of his essential expenses are already covered. Most of Lewis’s college tuition is paid for by scholarships. He lives at home with his parents, meaning he doesn’t have to worry about rent at the moment. Small side jobs allow him to cover everyday costs, like those for food and his phone.

He hasn’t decided where he’s investing his $600 yet, but is considering “some company that’s not going anywhere,” like Apple Inc. or Facebook Inc.

Lewis’s plans illustrate how the fallout from the coronavirus crisis is dividing the U.S. economy. Claims for unemployment benefits averaged 1.45 million a week last year, compared with about 220,000 in 2019, with tens of thousands of people struggling for food, shelter and income.

At the same time, the percentage of disposable income that households manage to stash away has jumped, home owners are seeing property prices increase and the stock market is soaring. The annual compensation rate for employees in November neared pre-pandemic levels.

Compensation Rebound

The monthly compensation U.S. employees received reached pre-pandemic levels in November.

To mitigate the hardship caused by the pandemic, U.S. lawmakers have agreed on a relief package that would send $600 to those with an adjusted gross income of less than $75,000, or $150,000 for married couples filing jointly, plus $600 for each dependent child.

That will be cut by $5 for every $100 earned above the income threshold, meaning those earning over $87,000 as an individual or $174,000 as a couple don’t get anything. The legislation also gives unemployed people a $300-a-week federal boost for at least 10 weeks.

“There are going to be a number of people who won’t need it and are still going to get the checks because the issuing of the check is purely based on income, not employment,” said R.A. Farrokhnia, Columbia Business School professor and executive director of the Fintech Initiative.

With social distancing and lockdowns still in place, Farrokhnia added, people have limitations on where they can spend the money. “Those who actually have been lucky to still have jobs end up saving more, because they are not putting money into the economy, they’re not going out to restaurants, and are on Zoom so they won’t be needing a whole lot of new clothes or shoes.”

U.S. Census data shows that the majority of U.S. households used the previous round of stimulus checks — $1,200 per person — in 2020 to cover basic expenses. About 80% of respondents in a Household Pulse survey reported using the funds on food and 77.9% on rent, mortgages or bills.

More than half of respondents said they spent the money on household supplies and personal-care products, and about 20% on clothing. And while 87.6% of adults in households with incomes of $25,000 or less planned to use their payments to simply meet expenses, over a third of adults in households with incomes above $75,000 reported that they would use the money to pay off debt or add to it to their savings.

“We know people earmark money for specific purposes, so this windfall is seen as not part of what they need to get from paycheck to paycheck but as something extra to be put towards something special,” said Neil Fligstein, professor of sociology at the University of California, Berkeley. “That’s why lots of people might try to save or invest it. It’s seen as ‘found money.’”

Disposable Income Rises

The monthly real disposable income per capita was higher in November than before the pandemic hit

Once Hailey Wiggins, a 25-year-old business owner from Houston, receives the $600 check, she’s probably going to keep 10% in cash, invest 60% in stocks and 30% in cryptocurrencies.

“We’re about to get flooded with all of this extra money that’s just going to stimulate the market,” says Wiggins, who entered the stock market in March of last year. “I’ve been investing and had this crazy return because of the pandemic and what it’s done to the stock market. I don’t see $600, I see way more money.”

“Although we can’t speculate directly on the data, the increase in spending on brokerages in June aligns with discount online brokerages like Robinhood reporting a spike in new accounts,” said Bill Parsons, Envestnet Yodlee’s group president of data and analytics. “Our data shows a significant uptick in new users during both the months of March, the month the CARES Act was passed, and June after everyone had received their checks.”

For some people, the latest stimulus money is too little to cover major bills or provide an incentive to save it. Instead, it’s prompting them to consider buying something nice as a way of making themselves feel better after a tough year.

“$600 can’t really cover my rent,” said George Takam Jr., a 22-year-old from Maryland, who is considering buying a PlayStation 5 gaming console. “I may as well use it on something nice and stimulate the economy.”

Takam is a nursing assistant and says his minimum-wage paying job barely covers his rent when he works a standard 40-hour week. He receives some assistance with his bills from his parents, who have also taken a financial hit by the pandemic. The stimulus check will mean he can spend money on something he enjoys.

“In a way, this is extra money — but it’s essential,” Takam said.

Updated: 2-12-2021

What If Artificial Intelligence Decided How To Allocate Stimulus Money?

New Treasury Department software points the way. But research suggests that it’s impossible to show that an artificial “superintelligence” can be contained.

If, like me, you’re worried about how members of Congress are supposed to vote on a stimulus bill so lengthy and complex that nobody can possibly know all the details, fear not — the Treasury Department will soon be riding to the rescue.

But that scares me a little too.

Let me explain. For the past few months, the department’s Bureau of the Fiscal Service has been testing software designed to scan legislation and correctly allocate funds to various agencies and programs in accordance with congressional intent — a process known as issuing Treasury warrants. Right now, human beings must read each bill line by line to work out where the money goes. If the program can be made to work, the savings will be significant.

Alas, there’s a big challenge. Plenty of tools exist for extracting data from HTML files (and, of course, XML files), but Congress initially publishes legislation only in PDF form; XML or HTML versions often arrive only weeks later. As many a business knows, scraping data from PDFs generally requires human intervention, leading to the possibility of copy errors.

The trouble is that PDFs have no standard data format. Even “simple” methods for extraction generally are designed to work only if the data in question is already presented within the PDF in tabular form.

Treasury’s ambitious hope, however, is that its software, when fully operational, will be able to scan new legislation in its natural language form, figure out where the money is supposed to go and issue the appropriate warrants far more swiftly than humans could. The faster the warrants are issued, the sooner the agency that’s supposed to receive the money can start spending.

Pretty cool stuff.

Yet this snapshot of the future inspires a wicked train of thought. Suppose that the Treasury Department software — which you are free to describe as artificial intelligence or not, depending on your taste — is later replaced by a better program, then by a better one and finally by one that can mimic the working general intelligence of the human mind.

What’s to stop this future AI from deciding on its own that Congress was wrong to give another billion to Agency A when, in the judgment of the program, Agency B needs it more? The program makes a tiny adjustment in a gigantic spending bill, and given that nobody’s actually read it, nobody’s the wiser.

Sounds improbable, right? HAL 9000 meets “Person of Interest” meets Skynet?

Not so fast.

For technophiles like me, recent achievements in AI are exciting, even breathtaking. AI is credited with reorganizing supply chains to help overcome disruptions caused by the pandemic. Deep learning systems may be able to discover coronary plaques more accurately than clinicians.

So why worry? After all, most of those in the field, including my professors when I studied artificial intelligence as an undergraduate, are confident that tight programming will keep even the most advanced artificial intelligence from escaping the bounds set by its creators. (Think Isaac Asimov’s Laws of Robotics.)

But there have long been dissenters, even among the experts. The prospect of an out-of-control AI has haunted researchers in the field for almost as long as it’s haunted science fiction writers. One thinks of Joseph Weizenbaum’s “Computer Power and Human Reason,” published back in 1976, or even Norbert Wiener’s classic “God and Golem, Inc.,” based on lectures the author delivered in 1962.

All of which brings us to an unnerving paper published last month by six AI researchers who argue that it is impossible to show that an artificial “superintelligence” can be contained.

The authors are an international group, representing universities in Germany, Spain, and Chile, as well as the U.S. According to their analysis, no matter how tightly an AI may be programmed, if it indeed possesses generalized reasoning skills “far surpassing” those of the most gifted humans, what they call “total containment” turns out to be incapable of formal proof.

Using what is known as computability theory, they hypothesize a superintelligent AI that incorporates a fundamental command never to harm humans. (Asimov again.) The programming will then require a function that decides whether a particular action will harm humans or not.

They proceed to show that even if it’s possible “to articulate in a precise programming language” a perfect set of “control strategies” to implement this function, there’s no way to know for sure whether the strategies will in fact constrain the AI. (The proof, although technical, is rather elegant, and fun to read.)

Don’t get me wrong: I’m not arguing that the Treasury Department should abandon its quest for a system that extracts data from PDFs, any more than I’m suggesting that any of the countless researchers working on various aspects of AI should halt. I continue to find the prospect of true artificial intelligence as exciting as ever.

What concerns me, however, is the way that public critiques of AI tend to pick around the edges rather than go to the heart of the matter. We often charge nascent AI systems with enhancing bias — for example, by exacerbating rather than correcting disparities in the distribution of health care.

Such issues are of undeniable public importance. But as the authors of the paper on computability remind us, you don’t have to be either a technophobe or a fan of apocalyptic steampunk sci-fi to see that the time for public conversation about the containability of AI is now, not later.

Updated: 8-26-2021

11% Of Young Americans Have Invested Their Stimulus Checks Into Crypto

Young Americans are choosing crypto over mutual assets and ETFs to invest their stimulus checks.

A new survey has found that more than one in ten Americans between 18 to 34 have invested part of their COVID-19 stimulus checks into crypto assets.

Conducted by CNBC and research firm Momentive, the survey queried 5,530 adults and found that 11% of the participants had purchased cryptocurrency with their stimulus money.

Roughly half of the respondents were found to have funneled their stimulus money into investments broadly — with 15% seeking exposure to stocks, 9% investing in mutual funds, and 6% backing exchange-traded funds (ETFs).

The majority of young Americans appear bullish on cryptocurrency’s future prospects, with 60% of survey participants indicating they see digital assets as a long-term investment. By contrast, 21% described crypto as a short-term investment, while 26% said they are engaging with the market out of excitement.

The appetite of young Americans for crypto appears to be growing, with a Harris Poll carried out in March indicating that only 7.5% of the respondents had invested their stimulus checks into digital assets.

The Momentive Poll also noted a surge in investment interest among Millennials and Gen Zers during 2020. The survey found that most young Americans used mobile trading apps to invest, while social media is their dominant source of market analysis.

Those who were game enough to invest their first stimulus check into crypto last year are reaping handsome rewards.

According to Bitcoin Stimulus, citizens who invested the entirety of the first $1,200 stimulus checks issued on April 15, 2020 into Bitcoin (BTC) would currently be sitting on more than $8,600 — a 620% gain.

Young crypto investors in Australia are seeing sizable profits from their cryptocurrency investments too.

According to a survey of Australians commissioned by local crypto exchange Swyftx, 20% of the participants identifying as a Millennial or a Gen Xer have reported profiting by tens of thousands of dollars from crypto investments over the past 12 months.