U.S. cryptocurrency exchanges say they’ve begun to see an uptick in customers buying bitcoin (BTC) or other digital tokens with their $1,400 stimulus checks from President Joe Biden’s latest coronavirus-relief and economic recovery plan.

But in the bitcoin market, the episode has proven to be a disappointment to some traders who were speculating last month that a new wave of demand might help push prices to fresh highs.

“It would be very difficult to get a full picture of how that money moved from Uncle Sam into bitcoin,” said Mati Greenspan, founder of Quantum Economics, a market analysis firm based in Tel Aviv, during an interview with CoinDesk.

Biden signed the $1.9 trillion COVID-19 relief bill into law on March 11, and the $1,400 stimulus payments started going out soon afterward, many of them via direct deposit into recipients’ bank accounts.

Soon afterward, some cryptocurrency traders began to speculate whether some of that money might be used to buy bitcoin. Mizuho Securities, a Japanese brokerage firm, estimated that $40 billion of stimulus checks could be spent on bitcoin and stocks, according to a survey published on March 15.

As recently as late last month, no cryptocurrency exchanges reported any major bump in $1,400 purchases, based on an informal survey by CoinDesk. Industry executives cautioned that it might be too early to judge.

Now, those purchases do appear to be happening, according to some firms, even if they’re not the tsunami that some bitcoin bulls might have expected.

“We have seen a significant number of deposits in the amount of the latest individual stimulus check,” Steve Ehrlich, CEO of U.S. cryptocurrency brokerage Voyager Digital, told CoinDesk in an email sent by a spokesperson.

Kraken, a San Francisco-based exchange, has seen an “uptick that may well stem from U.S. stimulus checks,” according to Thomas Perfumo, the company’s head of business operations and strategy.

But the rise in $1,400 “stimmy” deposits hasn’t been enough to bid up bitcoin.

Over the past month, BTC has struggled to decisively break above $60,000 amid slugglish trading activity. Slowing volume is typical of a consolidation phase in price action, diverging from the BTC price uptrend seen earlier in the year.

Chart shows BTC spot volume at its lowest point year-to-date. But there was little sign of a bitcoin stimulus.
Source: Skew

Traders could be waiting to accumulate BTC at lower support levels, especially given the near two-fold price increase this year.

“We expect weak BTC support around $56,000 down to $52,000, and stronger BTC support starting at $44,000 down to $42,000,” wrote Justin Chuh, senior trader at Wave Financial, a digital asset investment fund. “BTC resistance remains at $60,000.”

Retail traders aren’t the only ones on standby; institutional demand is also slowing. “The drop-off in volume has been more related to institutional volume going down, especially with the decline in futures market volatility,” said Hunter Merghart, head of U.S. operations at Bitstamp, a cryptocurrency exchange based in Luxembourg.

“We’re seeing new institutions coming on board from traditional finance backgrounds, ramping up deposits on the platform,” Merghart said. “These are buy-and-hold clients, unlike prop shops in 2017.”

Retail accounts make up about 80% of deposits on Bitstamp. The company experienced growth in retail deposits under $2,000 over the past month when U.S. stimulus checks were issued, Merghart told CoinDesk during a phone interview.

Robinhood, an online brokerage app, said Thursday that 9.5 million customers traded cryptocurrencies during the first three months of the year, up from 1.7 million in the fourth quarter of 2020.

There just wasn’t much of a bitcoin stimulus.

“I wasn’t expecting stimmies to pump bitcoin,” said Greenspan, of Quantum Economics. “There are much bigger players in the market now.”

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