- Advertisement -
- Advertisement -
BusinessCrypto crash will have limited impact on U.S. household...

Crypto crash will have limited impact on U.S. household wealth and labor supply: Goldman Sachs 

-

- Advertisment -

The global cryptocurrency market lost over $300 billion last week and about $1.7 trillion in the past seven months. But the impact on U.S. household wealth, spending and the labor supply are likely to be limited, according to Goldman Sachs.

The crypto market capitalization has plunged to around $1.3 trillion as of Thursday, from an all-time high of more than $3 trillion in November, according to CoinGecko. 

U.S. households own about one-third of the global crypto market, or about $423 billion as of Thursday, according to the rough estimate by analysts at Goldman Sachs, based on various surveys. The recent decline in the crypto market is “very small” relative to U.S. households’ net worth, which stood at $150 trillion in 2021, the bank’s analysts wrote in a Thursday note.  

Crypto holdings account for only 0.3% of U.S. households’ net worth, while the recent price drop of digital assets have reduced U.S. household wealth by about $300 billion, according to the analysts. In contrast, corporate equities account for about 33% of households’ net worth at the end of 2021, while their recent losses have likely erased $8 trillion of that wealth.

“These patterns imply that equity price fluctuations are the main driver of changes in household net worth, while cryptocurrencies are only a marginal contributor,” the analysts wrote. 

Therefore, a decrease in cryptocurrencies’ value would have a minor impact on the aggregate spending, according to the report.

The analysts also expect the crypto downturn to have a limited effect on labor supply.

In general, the decline in household wealth may incentivize some workers who left the labor market during the pandemic to return, they noted.

However, crypto investors are predominantly young males, a demographic group whose labor-force participation has been less affected by wealth fluctuations, the analysts wrote. Meanwhile, the labor-force participation rate of young males has already returned to pre-pandemic level, Goldman said.

The analysis indicates that the wealth generated from cryptocurrency has likely played an insignificant role in discouraging labor supply, thus the recent fall in its price will provide a limited boost to labor supply.

Bitcoin
BTCUSD,
+0.14%
late Thursday was trading at around $30,217, up 3.7% from 24 hours ago. The Dow Jones Industrial Average
DJIA,
-0.75%
closed 0.8% lower on Thursday.

- Advertisement -

Latest news

Gene Park Height, Weight, Net Worth, Age, Birthday, Wikipedia, Who, Nationality, Biography

An American columnist named Gene Park, Since October 2019, has functioned as a computer game reporter for The Washington...

Paul Rudd helps cheer up a 12-year-old boy after his classmates wouldn’t sign his yearbook

Paul Rudd may play a superhero on the big screen, but he became a real-life superhero to a 12-year-old...

Hunted Australia gets a July premiere date on Channel 10

Australian version of hit British reality show...

Who is Kareem Flake?(Boyfriend accused of stuffing woman’s body in Queens car trunk arrested) Wiki, Bio, Age, Instagram, Twitter & Quick Facts

Kareem Flake Wiki                             Kareem Flake Biography Who...
- Advertisement -

Monkey Pox cases double in NYC… – CITIZEN FREE PRESS

Send to Email Address Your NameYour Email Address Cancel Post was not sent - check your email addresses! Email check failed, please try...

Boris Johnson news latest: Brandon Lewis becomes fourth cabinet minister to resign

Sajid Javid says he will ‘never risk losing integrity’ during PMQs resignation speech In the latest of a likely fatal...

Must read

- Advertisement -

You might also likeRELATED
Recommended to you

- Advertisement -