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The Crypto Winter Would Not Affect The American Consumer But Plummeting Stock Prices Will Goldman Sachs Inc

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  • Hatzius estimates that corporate equities account for around 33% of household net wealth. According to Hatzius, the decrease in stock prices this year has reduced family net worth by almost $8 trillion compared to the end of 2021.
  • Cryptocurrency holdings account for only about 0.3 percent of U.S. household net worth, so any impact on the American consumer is likely to be minor, according to Hatzius.
  • The decrease in stock prices will be a negative driver of consumer spending starting in the third quarter of this year and lasting until the end of 2023. According to Hatzius, our predictions imply a large drag on spending from share price falls in 2022 and 2023.

According to Goldman Sachs, the new crypto winter is unlikely to have a significant impact on consumer purchasing. Jan Hatzius, Goldman Sachs’ chief U.S. economist, calculated in a recent research note that the global market for the 200 largest cryptos has lost $1 trillion in value since its high late last year, while U.S. consumers own approximately a third of the global crypto market.

Cryptocurrency Holdings Account For Only About 0.3 Percent Of U.S. Household Net Worth

However, cryptocurrency holdings account for only about 0.3 percent of U.S. household net worth, so any impact on the American consumer is likely to be minor, according to Hatzius.

When considering the impact of the crypto pullback on the US economy, a major caveat is that a large share of crypto wealth is held by citizens of other countries, Hatzius composed, later adding, When taking into account the effect of the crypto pullback on the US economy, a significant proviso is that an enormous portion of crypto abundance is held by citizens of other countries.

If consumer spending slumps this year, as evidenced by earnings results from Walmart, Target, and Kohl’s this week, Hatzius recommends focusing on decreasing stock prices rather than crashing cryptocurrency prices.

The Decrease In Stock Prices This Year Has Reduced Family Net Worth By Almost $8 Trillion

Hatzius estimates that corporate equities account for around 33% of household net wealth. According to Hatzius, the decrease in stock prices this year has reduced family net worth by almost $8 trillion compared to the end of 2021.

According to Hatzius, the decrease in stock prices will be a negative driver of consumer spending starting in the third quarter of this year and lasting until the end of 2023. According to Hatzius, our predictions imply a large drag on spending from share price falls in 2022 and 2023.

ALSO READ: The Drop CEO Thinks NFTs are Getting Washed Up In This Crypto Bloodbath

Nancy J. Allen

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