Stimulus Checks May Begin Arriving in Bank Accounts by Direct Deposit as Early as December 30, 2020.
[JACKSONVILLE, FL; 12/30/2020 @ 11:47AM; Updated 12/31/2020 @ 03:03 AM]
by W. Paul Alexander, Freelance Journalist
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It's official, everyone. The $600-per-individual round of new stimulus checks are being issued now, with direct deposit payments already arriving for some as early as December 30, 2020, with many expected to see their checks available to spend by January 1, 2020; despite the official payment date being January 4. As the crypto markets continue to soar, many people wonder if investing their stimulus in crypto is the right thing to do this time around?
Last week, on 12/22/2020, I wrote an article in which I gave a strong personal opinion in favor of investing as much of your upcoming stimulus checks as you possibly can; and if you are able to invest something -- that is, if you're fortunate enough not to be behind on a household of bills at this terribly tragic period of human history -- that I would strongly consider investing in cryptocurrency. In this article, I cited yet another from a series I wrote during the release of the first round of stimulus checks that tracked the growth of a $1200 BTC investment at the time the stimulus checks first began hitting bank accounts. There, I took readers on a journey that demonstrated how a $1200 investment in BTC had grown into roughly $1650.00 in a little less than a month.
During that period of time, things were insane. The OPEC nations drove the price of oil down to levels not seen in quite some time, if ever, just to put pressure on a non-OPEC oil producing nation. This, of course, caused a stock market panic, and right around the corner, the WHO declared SARS-CoV2, the virus that causes COVID, a global pandemic, sending traditional markets crashing. Even Bitcoin, which was seen as a safe haven investment, dropped to around $3700 at its lowest, which equaled a drop of somewhere around 60% of its value. Many Bitcoin enthusiasts who had declared it a safe haven lost faith, but very quickly, it rebounded, and is now holding in the range of $26000-28000 per BTC, which is an all-time-high.
Gold has also done well, but nowhere near the gains that Bitcoin has had this year. I bought back into BTC not at its low point, but at a still very, very low $6000-ish. My money has more than quadrupled since May.
There are articles that have been written dedicated solely to this astronomical increase in value, that predict or insinuate that there is still quite a bit of room to go.
Bitcoin has definitely proven itself as the safe haven it has always claimed to have been, despite the short -- but very significant -- hiccups at the beginning of the pandemic. A safe haven asset is there to make sure that your asset does not wither away with time, but either remains constant or grows. The massive-but-short drop in price had many questioning its status as a safe haven asset, pointing to gold as the prototypical example, which did not see a crash during this time, but rather gained, thanks to the weaker US Dollar. However, the quick turnaround and the massive increase in value seems to have assuaged these doubts, although one is left to wonder if the price is artificially higher not because of actual value, but because more people are buying in due to a sudden case of FOMO?
The artificial increases that come from market FOMO can be a very dangerous thing, as it created a runaway bubble that is bound to burst once it reaches its breaking point, leaving the ones that got in late holding that bag for the ones who bailed early. There are groups that actually take advantage of this FOMO as part of their modus operandi; it is the reason why pump-and-dump schemes exist. The less scrupulous around us understand that people tend to make emotional trades that are less informed by actual intelligence, but rather are driven by the fear that if you don't get in now, you'll miss the giant "moonshot" and won't be able to buy your crypto lambo. I digress...
Levity aside, understanding that this could be a slightly artificially inflated value, does it still make sense to put some or all of your stimulus check into Bitcoin? I still say it's a pretty safe bet, although I don't see increasing valuation occurring at anywhere near the level it has already increased by.
It's not just Bitcoin, though...
It's some of the other bit players that I'd start to look at.
Ethereum has steadily been hanging around the $700 mark, way more than double its earlier position in the year. With strong gains on the heels of its new proof-of-stake model known as Ethereum 2.0, many people feel as though the sky's the limit when it comes to the number 2 cryptocurrency, and I tend to agree. I have personally increased my Ethereum holdings to around 20% of my total.
Ripple has crashed following the announcement of an SEC lawsuit against them seeking over $1 billion USD and classification of XRP as a security. This has the potential to completely destroy the project, much in the same way that The DAO was dismantled after the SEC won a similar suit against what was once a very promising project. However, if Ripple survives the lawsuit and its aftermath, those who hold their positions through the worst may end up rewarded. As I explain here, because Ripple is facing this action from the SEC regarding a scenario that already has prior precedent, I personally am not comfortable with amount of risk. I liquidated the modest amount of XRP I had accumulated, choosing instead to transfer to a stablecoin with a 4% APY, just for the time being. Many think that Ripple will survive, but many also thought The DAO would survive the SEC's litigation. Only time will tell.
Litecoin has been hovering in the $120-$130 range lately, moving as predicted -- in tandem with, but slightly behind -- Bitcoin. Litecoin has always een one of my favorite projects, because it has the staying power and legitimacy that most coins never dream of achieving. I bought a decent amount when it was $35 per LTC, and have enjoyed a healthy return from my investment.
Of course, these are three examples of projects that have been around for a long time but are experiencing either massive growth or massive loss during this weird, wacky 2020 we have all shared in disbelief. There are, of course, thousands of other projects, hundreds of them even viable ones. De-Fi is exploding, and cryptocurrency investment apps like Coinseed and Coinbase allow easy entry into the crypto market. Even Paypal and Square have embraced crypto, so you can bet that other payment processors will join in soon enough.
However, if this is your first time making in investment, I suggest that you use a product like Coinseed, that allows you to view performance history and allows you to split up your total investment and spread it around to different assets using predefined percentages that are set by the user. You can choose portfolios that include just BTC, or BTC and Gold, or the Top 4, Top 8, Top 10, or Top 22 cryptocurrencies.
So, if you've read this and you are considering putting a bit of that whopping $600 stimulus check into crypto, I'd say you're headed down the right road. Before you invest in any project, though, make certain to do your own research. Don't rely on my words here, but rather, seek out other opinions -- expert opinions, even -- before you make a large investment of any type into any crypto. Once you have a wide variety of objective commentary, and analysis, and opinion, you are informed enough to make a decision. Whatever you decide, do it wholeheartedly.
References
2. https://fortune.com/2020/12/28/bitcoin-30k-how-high-could-it-go/
