First Mover: Bitcoin Miners Are Again Stacking Coins in a Positive Sign for the Market

PLUS: No 'Stimmy' Rally: Why the $1,400 Checks Brought So Little Bitcoin Stimulus
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Technician's Take

by Damanick Dantes

No 'Stimmy' Rally: Why the $1,400 Checks Brought So Little Bitcoin Stimulus

 

U.S. cryptocurrency exchanges say they've begun to see an uptick in customers buying bitcoin (BTC) or other digital tokens with their $1,400 stimulus checks from President Joe Biden's latest coronavirus-relief and economic recovery plan.

 

But in the bitcoin market, the episode has proven to be a disappointment to some traders who were speculating last month that a new wave of demand might help push prices to fresh highs.

 

Biden signed the $1.9 trillion COVID-19 relief bill into law on March 11. Soon afterward, some cryptocurrency traders began to speculate whether some of that money might be used to buy bitcoin. Mizuho Securities, a Japanese brokerage firm, estimated that $40 billion of stimulus checks could be spent on bitcoin and stocks, according to a survey published on March 15.

 

As recently as late last month, no cryptocurrency exchanges reported any major bump in $1,400 purchases, based on an informal survey by CoinDesk. Industry executives cautioned that it might be too early to judge.

 

Now, those purchases do appear to be happening, according to some firms, even if they're not the tsunami that some bitcoin bulls might have expected.

 

Kraken, a San Francisco-based exchange, has seen an "uptick that may well stem from U.S. stimulus checks," according to Thomas Perfumo, the company's head of business operations and strategy.

 

But the rise in $1,400 "stimmy" deposits hasn't been enough to bid up bitcoin.

 

Over the past month, BTC has struggled to decisively break above $60,000 amid slugglish trading activity. Slowing volume is typical of a consolidation phase in price action, diverging from the BTC price uptrend seen earlier in the year.

 

Chart shows BTC spot volume at its lowest point year-to-date. But there was little sign of a bitcoin stimulus (Source: Skew)

 

Retail accounts make up about 80% of deposits on Bitstamp. The company experienced growth in retail deposits under $2,000 over the past month when U.S. stimulus checks were issued, Hunter Merghart, head of U.S. operations at Bitstamp, told CoinDesk during a phone interview.

 

Robinhood, an online brokerage app, said Thursday that 9.5 million customers traded cryptocurrencies during the first three months of the year, up from 1.7 million in the fourth quarter of 2020.

 

There just wasn't much of a bitcoin stimulus.

 

"I wasn't expecting stimmies to pump bitcoin," said Mati Greenspan, founder of Quantum Economics. "There are much bigger players in the market now."

 

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Introducing CoinDesk Research's quarterly review, covering the main developments over the first three months of 2021 in Bitcoin, Ethereum, DeFi, stablecoins and – of course – NFTs.

 

The report presents over 100 insights on how retail investors are picking up market momentum, how Ethereum activity is not being driven by NFTs as much as one might think, how stablecoins have responded to increased activity, how DeFi is for now the realm of decentralized exchanges and more.

 

Download the CoinDesk Quarterly Review, First Quarter 2021.

Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. 

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