Using relief funds to invest in Bitcoin? Well-known American YouTuber Mo Cai Xi unboxes and shares how to spend the subsidy.

In the United States, the economy has worsened due to the pandemic, leading to a rise in unemployment. In addition to printing money to stimulate the economy, the government has also issued relief funds. A well-known American YouTuber in Taiwan, Mo Caixi, recently filmed a video of unboxing the relief fund check, with one of the purposes being to "invest in Bitcoin." What are their reasons for doing so? What is Taiwan's relief fund policy like, and is it possible to invest it?

What is a Stimulus Check?

In early March, the United States announced stimulus measures called "Economic Impact Payments", providing financial assistance to eligible individuals through direct deposits or mailed checks, with individuals receiving up to $1,200. The checks being discussed next are what we call Stimulus Checks.

According to the data released by the Internal Revenue Service (IRS) on May 22, a total of $258 billion has been disbursed through direct deposits and checks. Many Americans can receive the funds directly into their bank accounts or cash the checks at banks. Additionally, it was reported that Twitter's founder, Jack Dorsey, through his company Square, offers an app called Cash App, which can be used to receive the stimulus funds.

Unlike Taiwan's universal distribution of stimulus vouchers, the Stimulus Check in the U.S. does not have complex eligibility restrictions like relief subsidies, but is distributed based on criteria such as annual income.

How does YouTuber Mo Caixi plan to use the stimulus check?

In a recent video, well-known American YouTuber Mo Caixi and Adam unboxed the U.S. stimulus check. Bitcoin-friendly Adam, who had previously accepted Bitcoin payments while selling sweet potatoes on the streets in the U.S. last year, this time decided to invest a portion of the stimulus check in Bitcoin. What is their reasoning?

As a married couple, they are eligible to receive $2,400. Mo Caixi and Adam mentioned that they intend to use the stimulus check for a good purpose, defining "good" on three levels: saving money (good but not stimulating the economy) -> shopping (better, as it stimulates consumption) -> shopping and giving back (the best, as it stimulates consumption and helps others).

Adam also mentioned that due to continuous money printing in the U.S., leading to inflation and devaluation of the dollar, they decided to use a portion of the money to buy cryptocurrency (Bitcoin) as a hedge against inflation. They also asked their viewers for suggestions on how else to use the funds.

Different Usage of Stimulus Checks in the U.S.

The economic distress in the U.S. this time may bring different pressures to the public compared to the 2008 financial crisis. According to a report by MarketWatch, during the implementation of stimulus measures in 2008 by the American Economic Association (AEA), 90% of the funds were spent on durable goods (such as cars). However, this time is different, as most people are using the funds for daily expenses, rent, and bills. For many, $1,200 may not be sufficient to fully support their current living conditions.

Moreover, investing in Bitcoin with the stimulus check is also becoming a phenomenon. According to a report by Forbes, many Reddit users shared their experiences of investing their stimulus checks in Bitcoin, and Brian Armstrong, the CEO of the well-known U.S. exchange Coinbase, mentioned that the increase in purchases and deposits in the exchange aligns with the scale of the stimulus checks, indicating that many are indeed investing in Bitcoin.

Is it possible to invest Taiwan's stimulus check?

Currently, there are two low-threshold relief options available to the general public in Taiwan:

1. Stimulus Vouchers: Also known as Triple Stimulus Vouchers, starting from July 1, they will be distributed digitally and in paper form. All Taiwanese citizens are eligible to receive them. Digital vouchers can be obtained through credit cards and electronic tickets/tokens (such as EasyCard, electronic payment apps); paper vouchers can be collected at post offices with a health insurance card. Spending NT$3,000 entitles a refund of NT$2,000, or by paying NT$1,000, one can receive NT$3,000, aiming to stimulate the economy.

2. Relief Loans: The Ministry of Labor has introduced relief loans for citizens over the age of 20, allowing a maximum loan of NT$100,000, with the first year's interest subsidized by the government. In the three-year installment contract, no principal payment is required for the first half-year, and the principal is repaid in six installments in the second half of the first year. Principal and interest (1.845%) repayment starts in the second year, with a limit of 1 million applicants (currently full).

Both relief options mentioned above make it easy for the general public to receive aid. The primary purpose of the Stimulus Vouchers is to stimulate consumption, making it meaningless to invest in Bitcoin. While the relief loan of NT$100,000 may provide ample returns for investing in cryptocurrencies, there are risks of closure or theft for providers of fixed-term deposits. Furthermore, investing in cryptocurrency spot or futures contracts carries higher volatility risks, making it easy to incur losses that may not be recovered. Therefore, it is advisable not to attempt this lightly.