- Bitcoin loses its brave hold above USD 7,000 as crude oil drops to lowest level since 1999
- Americans are spending some of their stimulus cash on crypto
- Most crypto owners spend crypto on food and bills
Black gold lost its luster today on Monday morning in the United States as prices for West Texas Intermediate crude oil futures expiring in May plunged as much as 99% to 1 cent a barrel, its lowest level on record. Price per barrel dipped below USD 11, a level last seen in 1999, making today the worst day for oil trading in the new millennium.
Bitcoin, on the other hand, could not manage to stay above USD 7,000 right now, facing off some selling pressure but not such intense attacks that bulls are worried. Nevertheless, the resistance at USD 7,000 could not be overcome and Bitcoin now trades at a daily low so far of USD 6,844 (CoinDesk). Will demand for Bitcoin rise with halving coming up in three weeks, and as other commodities like oil face a lowered demand with manufacturing, travel and industry all put on hold thanks to the coronavirus lockdown throughout the world?
Time may yet tell the direction of Bitcoin in the long-term, but for now, we could be seeing a spurt of value in Bitcoin, with reports emerging that some Americans are already looking to spend some of the cash just received last week from the US government as part of a stimulus package to tackle the economic slowdown and joblessness now looming. 80 million checks, each for USD 1,200 was meant to help Americans pay for food, bills and other essentials, but some look to be headed for exchanges rather than grocery stores, if Coinbase is to be believed.
Its CEO, Brian Armstrong, revealed on Friday that there was an unusual spike of buys and deposits worth the exact amount of USD 1,200, quadrupling this week to make up 0.45 of all buys and deposits.
For sure, this is still firmly in the real of speculation, since it is, without further details from the exchange, impossible to tell if these really are Americans depositing checks, or if they are even buying crypto, since they could simply be depositing money there. But another exchange, Binance US, also confirmed the same spike, with a spokesperson admitting: “People do seem to have deposited exactly $1,200 into Binance US in the past couple of day.”
Speaking of spending money on essentials, there is now new data to reinforce earlier findings that more and more people are using Bitcoin to buy essentials like food and clothes, rather than on illegal items. This further debunks the unfortunate public perception that Bitcoin use is closely associated with criminal activity.
Analysis firm Visual objects published its report, ‘Understanding Cryptocurrency: Myths and Realities’, summarizes their findings by saying:
“People do not always have a solid understanding of how cryptocurrency works, given its mysterious origins. Visual Objects surveyed 983 people who are familiar with digital currency to learn how people perceive and use cryptocurrency. We found that although one-third of people think owners use cryptocurrency on illegal items, they really use it on more mundane purchases such as clothing and food.”
As much as 30% believed that crypto was used to buy illegal items, while 40% believed it was to buy stocks. Some other interesting findings include:
- Less than one in five people (16%) have an investment in crypto, preferring “more mainstream methods of money”.
- Bitcoin continues to be the most popular crypto owned by people at 70% of total ownership.
- Most people (72%) have spent crypto on daily expenses, while almost 40% use it to buy food and just over a third use it to buy clothes. A surprising 26% of people have bought dangerous items such as weapons (15%) and drugs (11%) with crypto.
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