US President Donald Trump said he is open to giving Americans rebates of up to $2,000 using funds collected from tariffs. Speaking to One America News Network, Trump said the rebates would act as a kind of “dividend to the people of America.” He believes total tariff revenue could reach more than a trillion dollars a year.
The main goal, according to Trump, is to use the funds to bring down national debt. But part of the revenue could be sent back to households in the form of direct payments. This idea comes at a time when personal spending and market participation are under close watch by analysts.
The comments have led to discussions about how people might use the extra money if the plan moves forward. During the COVID-19 pandemic, many Americans used government payments to invest in riskier assets, including cryptocurrencies.
Link Between Household Relief and Crypto Activity
A 2023 study from Harvard Kennedy School, led by researcher Marco Di Maggio, found that cash payments reduced financial pressure on households and increased interest in investing. According to the study, people were more likely to buy crypto when they had fewer budget concerns or expected future financial strain.
The same research suggested that even the fear of rising prices pushed some toward digital assets. Crypto was seen as a hedge against losing purchasing power. This behavior was visible during the pandemic, when stimulus checks helped trigger a sharp rise in demand for altcoins.
If a similar round of rebates is introduced now, analysts say the same behavior could return, though not necessarily at the same speed or scale. Many smaller crypto assets saw major inflows in 2020 and 2021, driven mostly by retail investors.
Differences Between Now and the 2020-21 Bull Run
Altcoins surged in 2020 and 2021 when households received multiple rounds of relief checks. A large portion of that money entered the crypto market. At the time, Bitcoin’s share of total crypto value dropped from 73% to 39% in six months. The market was driven by smaller, lesser-known coins as retail trading activity soared.
Jasper De Maere, a strategist at market maker Wintermute, said in a LinkedIn post that the 2020 rally was shaped by retail traders.
“In 2020, crypto’s institutional rails were barely in place: no spot ETFs, fragmented custody, regulatory ambiguity,” he wrote.
Retail money accounted for most trading activity back then.
The current situation is different. Interest rates are now above 4%, and the market has grown. There are more regulated products and platforms, and investor behavior has shifted. Altcoin rallies are more measured. The environment is not as open to fast, broad-based gains across all assets.
Analysts believe higher interest rates are one reason. In 2020, near-zero rates left few options for yield, pushing investors into crypto. That’s no longer the case. With more stable income options available, investors are being more selective with their risk exposure.
The crypto market is also much larger now, which makes large gains harder to achieve across the board.
“Higher rates and vastly larger market cap make indiscriminate altcoin rallies far less likely,” De Maere said.
He added that any future growth will likely depend on whether the project shows real use and demand.
Whether the proposed $2,000 rebate would trigger another wave of retail investment is still unclear. Market conditions are more complex today. But the pattern of behavior seen in earlier relief programs suggests that new cash in hand often leads to increased risk-taking.
