Analysts at banking giant Goldman Sachs claim that although US households account for a third of the global crypto market in terms of total investment, the recent crypto market meltdown will has very little impact on the economy. Goldman Sachs economists explain that total US household net worth stands at $150 trillion (about Rs 1,16,31,27,920) according to last year’s data. On the other hand, the crypto market has lost its valuation of $1 trillion (approximately Rs 77,53,395) in the last year. As a result, economists say this is still “very small” for the overall net worth of US households.
Bloomberg cite a study of Goldman Sachs shows that every Dollar lost in stocks results in a 3 cent decrease in spending. This five-month sell-off in 2022 would mean more than $300 billion in spending cuts (about 23,26,265 crore). According to Goldman Sachs According to the study, stocks account for 33% of total US household net worth at the end of 2021. Cryptocurrencies, on the other hand, account for only 0.3%.
These models imply that stock price movements are the main driver of changes in household net worth, while electronic money Goldman Sachs economists wrote.
Furthermore, Goldman Sachs does not expect the ongoing market correction to cause a spike in the workforce among young men, the demographic most likely to be affected by falling prices. .
The banking giant added, “…electronic money investors are more inclined towards men and younger, a demographic whose workforce participation is generally less affected by fluctuations in wealth. “
That said, the bank believes that more people will be encouraged to return to work due to tighter financial conditions, also noting that a drop in crypto prices will have ‘limited scope’ on the issue. that’s because it makes up such a small percentage of the average household’s net worth.
