Market data suggests that investors would have been sitting on impressive gains if they had purchased XRP using their COVID-19 stimulus check in 2020.
Notably, successful business executives have always advised market participants to seize every investment opportunity. For instance, legendary investor and Berkshire Hathaway Chairman Warren Buffett suggested that investors spend what they have left after saving, and not save what they have left after spending.
Also, PIMCO co-founder Bill Gross urged investors always to have reserved cash for investment opportunities that might require additional capital. It is against this backdrop that we recently assessed how much an investor would have today if they committed their COVID-19 stimulus check into XRP in 2020.
The COVID-19 Relief Stimulus
For context, the U.S. government rolled out two rounds of economic relief payments in 2020 as part of its response to the COVID-19 crisis. The first round began after the CARES Act, a $2.2 trillion stimulus package, was signed into law on March 27, 2020.
Eligible individuals received up to $1,200, while married couples filing jointly received up to $2,400, with an additional $500 provided for each qualifying child under 17. Notably, this initial round resulted in the distribution of 161.9 million payments, totaling $271.4 billion by the end of March that year.
The second round came with the passage of the COVID-related Tax Relief Act, signed into law on December 27, 2020. It offered up to $600 per individual and $1,200 per qualifying couple, with a higher child benefit of $600 per eligible dependent under 17.
Notably, payments reached recipients through direct deposits, mailed checks, or prepaid debit cards. The IRS launched the first wave of payments in early April and began issuing the second round in late December.
What if You Had Invested in XRP?
Most recipients leveraged the stimulus check to offset some of their bills, especially considering the situation surrounding work and economic activity at the time. However, what if some of these individuals had invested in XRP at the time?
Specifically, XRP traded at an average price of $0.18 in early April 2020, when the first round of payments hit. If, as an individual, you had committed the $1,200 to XRP, you would have amassed 6,666 tokens.
Meanwhile, at the time the second round of payments came in late December 2020, XRP changed hands at $0.20. If, as an individual recipient, you had chosen to invest the $600 from this second round in XRP, you would have ended up with 3,000 XRP tokens.
Together, you would have procured 9,666 XRP with the $1,800 from the COVID-19 stimulus check. Today, with XRP trading at around $3.2, these 9,666 tokens would be worth around $31,000, an impressive 1,622% increase over the past five years. For perspective, this represents a CAGR of 77%.
Interestingly, if you had invested in Bitcoin instead, which traded for $6,800 in April 2020 and $26,000 in December 2020, you would have amassed 0.1994 BTC, currently worth $23,538. This confirms that XRP would have been a better bet than Bitcoin.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
