Coinbase reports a record number of the $1,200 deposits

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys… read more.
on Apr 17, 2020
Updated: Apr 28, 2020
  • The largest US crypto exchange, Coinbase, recently reported a curious surge in the number of $1,200 deposits.
  • The deposits came yesterday, April 16, just after around 80 million US citizens received financial aid.
  • There is no official data confirming that Americans are using financial aid to invest in crypto.

Coinbase, the biggest US-based cryptocurrency exchange, recently reported a large number of rather specific deposits. The deposits started to arrive just after the US government started distributing stimulus checks as part of its coronavirus relief program.

Coinbase CEO reveals interesting deposit-related data

The data of the new wave of deposits comes from Coinbase’s CEO, Brian Armstrong, himself. Armstrong noted that the exchange experienced a record number of $1,200 deposits on Thursday. Typically, amounts of $1,200 represent 0.1% of Coinbase’s total deposits. Yesterday, however, that percentage surged to 0.4%.

https://twitter.com/brian_armstrong/status/1250907110730170370

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

One interesting detail is the fact that all of these deposits came after the US started distributing its $2.2 trillion coronavirus stimulus package. The US President, Donald Trump, revealed that every adult who earns less than $75,000 per year will receive financial aid. This includes checks with the amount of exactly $1,200.

Interestingly, the deposits that started arriving at Coinbase included this same amount — meant for fighting the financial struggle — $1200. Another interesting detail is that the funds started arriving at Coinbase immediately after Americans started receiving them from the government.

So far, around 80 million people should have received direct deposits into their bank account by Wednesday. This was confirmed by the Treasury Secretary, Steven Mnuchin.

What did Americans use the money for?

Netspend, which is the entity that processed around $1 billion in this relief program, said that most people use the funds as expected. They are paying for fast food, groceries, gas, pharmacies, or simply withdrawing cash.

However, with the new data arriving from Coinbase, many speculate that a fair number of receivers used the money to purchase cryptocurrencies.

This does not come as a surprise to everyone, of course. Some experts said that extensive money printing might lead to a drop in USD value, leading towards hyperinflation. With such concerns, it makes a lot of sense for people to be on the lookout for alternative assets.

Another major coincidence is that the price of BTC surged by around $550 within only an hour and a half yesterday. BTC surged from below $6.500 to above $7,000, once again breaching a crucial resistance.

Even now, it still sits above this level. Meanwhile, the total crypto market cap skyrocketed by 8.5%, going from $187 billion to $203 billion.

Of course, with no confirmation that Americans used the financial aid to invest in crypto, this remains pure speculation. But even so, this is quite a few coincidences that came in quite a convenient order, which is worthy of notice.

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro
10/10
67% of retail CFD accounts lose money