I love busting myths and calling out misconceptions. This week, I'm shedding some light on the narrative that Bitcoin's bull market was triggered and fueled entirely by stimulus checks.

1 week ago 11

On the surface, this mentation makes a batch of sense, and I was a large believer myself that logic would dictate that other liquidity could beryllium what carries a bull market, possibly adjacent beryllium the sole cause.

Until I really looked astatine the data.

While determination was indisputably immoderate affirmative effect of having other currency connected the market, numbers showed that the effect wasn't arsenic large arsenic you would expect. Nor was it adjacent what triggered the bull market.

Why wouldn't implicit $5 Trillion of other currency not person a profound interaction connected Bitcoin and the crypto market?

Keep successful mind, the afloat $5 Trillion didn't spell into stimulus checks, overmuch little into crypto.

Only $1.8T went to individuals.

The remainder went to healthcare, section government, hose industry, businesses, etc...

Something that would possibly inactive assistance stocks more, but not truthful overmuch crypto (at the time, the correlation to stocks inactive wasn't strong, astir 0.4-0.5).

Even the $1.8T didn't each spell to stimulus checks. A large portion went to Child taxation credits, SNAP, unemployment, retirement.

https://www.nytimes.com/interactive/2022/03/11/us/how-covid-stimulus-money-was-spent.html

$817B went to stimulus checks.

What percent of the stimulus checks really went into crypto?

According to Mizuho research, astir 10% of stimulus recipient planned connected investing their cheque successful stocks oregon crypto.

https://www.yahoo.com/video/nearly-10-of-the-380-billion-in-stimulus-checks-may-be-used-to-buy-bitcoin-and-stocks-survey-131009531.html

Mizuho has estimated that the magnitude utilized from stimulus cheque would lone person added astir a 2-3% to the marketplace worth of Bitcoin.

What was happening to Bitcoin earlier Covid, and did Covid and Fed printing trigger the bull run?

One of the archetypal problems I ran into with this theory, is Bitcoin was already astatine the opening of a bull market, and had already made its turning point, earlier immoderate of the stimulus checks, oregon earlier Covid became a large satellite issue.

r/CryptoCurrency - I emotion  busting myths and calling retired  misconceptions. This week, I'm shedding immoderate   airy  connected  the communicative  that Bitcoin's bull marketplace  was triggered and fueled wholly  by stimulus checks.

Turning constituent for Bitcoin, opening of bull market, and Covid interruption

Stimulus checks didn't trigger the bull market.

The bearish and selling unit had already been exhausted, already reverted to bullish and buying pressure, already had a breakout, and already had its archetypal parabolic tally to $13K. Which had already corrected, and the resuming bull inclination got interrupted with the Covid crash.

The existent timeline of the stimulus checks versus the terms of Bitcoin.

In the pursuing illustration are the zones wherever the stimulus started to deed people's accounts.

Direct deposits are yellow, mailed checks are orange.

It's successful "zones" due to the fact that not everyone got their checks instantly oregon astatine the aforesaid time. There were besides waves, delays, etc...

Keep successful mind, determination would apt beryllium further clip betwixt the clip those funds are received, and the clip they tin really beryllium traded connected an exchange, particularly if they person to unfastened their archetypal account.

r/CryptoCurrency - I emotion  busting myths and calling retired  misconceptions. This week, I'm shedding immoderate   airy  connected  the communicative  that Bitcoin's bull marketplace  was triggered and fueled wholly  by stimulus checks.

First stimulus cheque distribution

r/CryptoCurrency - I emotion  busting myths and calling retired  misconceptions. This week, I'm shedding immoderate   airy  connected  the communicative  that Bitcoin's bull marketplace  was triggered and fueled wholly  by stimulus checks.

Second stimulus cheque distribution

r/CryptoCurrency - I emotion  busting myths and calling retired  misconceptions. This week, I'm shedding immoderate   airy  connected  the communicative  that Bitcoin's bull marketplace  was triggered and fueled wholly  by stimulus checks.

Third stimulus cheque distribution

All 3 distributions are followed by a downtrend.

The quality is successful the 3rd distribution, determination is crabbing passim astir of the distribution, followed by a crash.

Research has recovered that the stimulus checks whitethorn person lone affected Bitcoin trading by an estimated 3.8%

According to the probe done astir stimulus checks, by the Federal Reserve Bank, lone 0.02% of each the Cares Act money distributed went into Bitcoin, with lone an estimated 3.8% summation successful trading resulting from the stimulus money.

https://www.clevelandfed.org/en/newsroom-and-events/publications/working-papers/2021-working-papers/wp-2113-impact-of-covid19-stimulus-checks-on-retail-trading-in-bitcoin.aspx

3.8% is inactive impactful, but astir apt obscurity adjacent arsenic precocious arsenic radical would person expected. Much little the root of the bulk of the trading.

The existent effect of the stimulus checks.

The stimulus checks inactive had immoderate effect.

But not truthful overmuch successful creating oregon expanding the bull market, but successful compensating and decreasing the antagonistic macros and fears of the Covid crisis.

The marketplace was successful precocious fearfulness of businesses closing, and going into a carnivore market.

The stimulus checks wiped retired a batch of that fear.

The effect didn't travel truthful overmuch from the stimulus checks going into crypto, arsenic the information shows, but came much successful a intelligence mode successful wiping retired the fearfulness of a carnivore marketplace from the Covid crisis, conscionable capable to let the crypto bull marketplace to resume.

The stimulus cheque didn't adhd overmuch wealth oregon liquidity to crytpo, but it kept mean Joe from moving retired of money, and removed the pitfall of Covid, to let the crypto bull marketplace to proceed to tally escaped and unimpeded.

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