Lamborghini Bros No More: Crypto Is Creating a New Wealth Effect
- Research shows crypto boosted home prices in some markets
- Dollar of unrealized crypto gains led to nine-cent expenditure
A Lamborghini Diablo SL automobile.
Photographer: SeongJoon Cho/BloombergThis article is for subscribers only.
It’s an oft-told anecdote littering social media: Those who invested early in cryptocurrencies have enjoyed life-changing wealth.
How much that extra cash gives them confidence to spend more — a phenomenon economists call the wealth effect — is a hot topic whenever crypto prices are surging. A group of researchers tried to quantify it and determined that crypto bonanzas in the US aren’t exactly spent like windfalls from winning the lottery. And so far, the effect has been relatively modest on the $28 trillion American economy. But if the asset class continues to boom, the study provides insight on potential game-changers in consumer patterns.