Have Stimulus Funds Resulted in an increase in Personal Crypto Investments?

So, while sitting tonight at my terminal, taking a break from writing an article for a client, I started having a conversation with my wife about Bitcoin, the COVID-19 Pandemic, the massive shift that all of our lives have taken since March 2 (more on that date later), and whether or not these conditions would be enough to turn enough people on to investing in blockchain technologies in general that mass adoption becomes a very real possibility in the immediate future.

A Couple of Things

At the time of writing this article, on April 29, 2020 at 03:02 AM EST, the current state of cryptocurrencies, according to CoinMarketCap, is as follows:

Cryptocurrencies:  5,402

Markets:  21,499

Market Cap:  $228,438,322,248

24h Vol:  $137,826,603,226

BTC Dominance:  63.7%

This means that there is a total of $228.44 billion USD worth of cryptocurrency currently in circulation globally.

If you are new to this world and want to understand more about terms like "BTC Dominance" and "Market Cap", I suggest reading my article "Blockchain Tutorials," where I give comprehensive yet easy-to-understand definitions of some of the most common terms, definitely the most essential terms, that you will hear in the world of crypto.

Secondly, when I say "stimulus funds" in this article, I am referring to all activity since the passing of the CARES Act, NOT the smaller interim bills that were passed previously and only added a few billion to the economy as a whole. The CARES Act was passed in late March on the 27th. Because funds took quite some time to get to consumers and businesses under the first round of Paycheck Protection Program funding, we will look at these figures based on the state of the industry from April 1 to current.

Okay? So what.

Well, by knowing the market cap, we have the starting source of information that we can use as a reference point in determining whether or not direct stimulus payments have led to more blockchain investment.

Because we know today's market cap and today's date, it's a pretty simply operation to answer our question.

Since the earliest US stimulus payments would've had any effect on market conditions would have been April 15, it would make sense for even more investments to have occurred after that date as well.

So let's look at the historic figures.

On March 17, the market cap was at it's lowest at any point since the crash.

It was $131 billion at it's lowest that day, but by April 1, it had recovered to just a little over $181 billion, meaning that $50 billion in recovery had already taken place at the time the CARES Act was signed into law.

However, since that time, market cap has increased to almost $229 billion, meaning that an additional $48 billion has been added to the market cap since stimulus funds reached the hands of those who could invest.

Right, but...

Yeah, I know what you're thinking, and you're absolutely right -- much more data is needed to truly see what impact stimulus payments have had on the cryptocurrency economy.

While it's true that close of 50 billion in gains have been added to the market cap during our target time period, there have been many other things happening that have much more likely have had an impact on market cap than just stimulus payments alone.

First, volatility. BTC value and most alts have gained significantly in value since their lowest point during the COVID Cryptopanic. This is likely by far the largest contributor to the total market cap. These recovering values, while still not at pre-COVID levels, have definitely contributed a larger share to growth than "new money" personal investments as new token/coin purchases.

The other important thing to remember is that markets generally have started to rebound and gain over their crash levels, while still being hampered greatly by social distancing procedures. This has likely had a net positive effect on cryptomarkets.

So What do You Think?

Don't just read this article, interact with it! Do you think that stimulus payments and uncertainty about the stability of the fiat system have resulted in an increase of market cap and overall health of the blockchain industry? Was the inclusion of "digital dollar" language in draft legislation enough to turn others on? Was it the halving?

I'd love to hear your comments.

Here is an image of market position for the entire crypto universe, courtesy CoinMarketCap, taken as a screen grab at the time of publishing.

Hope to read all your comments very soon!

UPDATE: 04/29/2020 at 9:05 PM

So, today we saw a massive increase in BTC price. I have shared my opinions regarding the reasons why we are seeing this rise, and my humble opinion is that it has more to do with "halving hype" than anything else right now, but I think it will hold.

Now where does that leave us when it comes to decided whether or not stimulus funds contributed to this...

It's very possible that new users are flooding into the BTC blockchain via exchanges and devouring the sell offers, making the price of bitcoin skyrocket. I don't think this is the case though.

I will be following this and revising as I know more. And please, your comments are welcome for good, civil, and thoughtful discourse.