According to Bloomberg, researchers have attempted to quantify the impact of cryptocurrency wealth on consumption and found that its impact on the $28 trillion U.S. economy is relatively limited. The study found that new cryptocurrency wealth has increased household consumption by about $30 billion in total over the past decade, with each dollar of unrealized gains leading to about nine cents of consumption. Although this figure is almost twice the marginal propensity to consume of stock market returns, it is only one-third of income shocks such as lottery wins.
The researchers also found that despite frequent show-offs on social media, not all cryptocurrency wealth is squandered on luxury cars and jewelry, with some being used to buy properties, boosting the real estate market in areas where cryptocurrencies are popular.
In addition, the researchers found that the increase in cryptocurrency wealth mainly flowed into discretionary consumption, but a considerable portion also flowed into the local real estate market, especially in places where cryptocurrency is popular, such as California, Nevada, and Utah.
