The IRS is set to distribute missed COVID-19 stimulus payments to taxpayers in January. The payments previously fueled a massive crypto investment surge during the pandemic.
IRS Corrects Tax Return Errors
The US Internal Revenue Service (IRS) will distribute approximately $2.4 billion to taxpayers who missed COVID-19 stimulus payments during the 2020 and 2021 pandemic.
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By the end of January, nearly one million taxpayers are expected to receive special payments of up to $1,400 each, according to an official announcement by the IRS.
The payments address errors in 2021 tax returns and are part of a broader effort to correct issues from three stimulus rounds, which provided $814 billion in financial relief during the pandemic.
IRS Stimulus Checks Sparked Crypto Investment Surge
During the 2020-2021 pandemic, stimulus payments provided financial relief and fueled a wave of cryptocurrency investments.
Nearly 1 in 10 Americans directed portions of their checks into the crypto market , with their investments steady throughout the multiple rounds of stimulus payments.
Major exchanges like Coinbase and Binance saw record sign-ups and trading volumes as stimulus funds spurred retail crypto investment.
In early 2021, about 20% of Coinbase users were first-time buyers, contributing to 6 million new sign-ups in Q1, primarily fueled by stimulus-driven interest in the affordability and accessibility of crypto.
Bitcoin’s price saw a dramatic rise, reaching an all-time high of over $60,000 in April 2021, up from around $30,000 at the start of the year.
Along with Bitcoin, other cryptocurrencies such as Ethereum (ETH) , Dogecoin (DOGE), and newer altcoins also saw price increases and heightened interest.
Why This Matters
The IRS stimulus checks helped fuel retail interest and market prices, with millions of Americans contributing to the rise of cryptocurrencies during the pandemic.
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