Cuban has pitched an interesting “trickle up” take on stimulus spending in lieu of the current program that has the potential to be an enormous boost for crypto assets.
Mark Cuban Proposes Trickle Up Stimulus With Set Expiration Date
Back in April, the US government issued stimulus checks valued at as much as $1,200 per individual taxpayer. The money distributed was meant to help increase consumer spending and help individuals weather the lockdown caused by the pandemic.
The problem with this strategy, however, is that individuals fearing the worst has yet to come, may be socking the money away into their savings accounts for a rainy day, rather than turning to retail small businesses to spend.
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The lack of spending is harming struggling small businesses and hard-hit retailers, but consumers aren’t just spending less out of fear and savings, they also can’t go anywhere.
Mark Cuban, billionaire investor and one of ABC’s “Sharks,” alongside the likes of Kevin O’Leary, Robert Herjavec, and Daymond John, has a better idea for stimulus checks, focusing on “trickle up economics.”
In addition, because this will take time, we need to consider an interim spending stimulus program. All 128m households could get a $1k check every 2 weeks for the next 2 months that MUST BE SPENT WITHIN 10 DAYS OF RECEIPT OR IT EXPIRES. This “use it or lose it” prog will
— Mark Cuban (@mcuban) May 17, 2020
Cuban proposes that all individuals get an additional $1,000 checks every two weeks, for the next two months. This money, however, comes with a stipulation: spend it, or lose it.
The expiration date tied to the funds would encourage consumers to spend to take advantage of what’s being offered. Few consumers would let the money simply go to waste, so they’d find something – anything – to spend it on. Possibly even crypto.
Money Made To Move Could Be Enormous Boost For Crypto
Forcing consumers to spend money, will absolutely work. Few taxpayers would be willing to let a free hand out from the government go to waste.
Money would flow into high price tag consumer goods such as TVs, computers, appliances, and even home improvements. The economy would find the needed stimulus.
But just as we saw with the initial $1,200 checks, some of this money would flow into Bitcoin and the rest of the crypto space.
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Immediately following the first round of checks, Coinbase saw an uptick in buys of Bitcoin at $1,200 per purchase.
These hard-capped assets have been in a downtrend for two or more years. Sudden inflow of capital into the illiquid assets, could reignite another crypto bubble.
Crypto assets are a high-risk investment that often comes with the advice to never invest more than you can comfortably afford to lose. But if it was free money from the government that was going to be lost anyway if you don’t spend it, why wouldn’t some investors let it ride by buying Bitcoin and altcoins.