The narrative that early BTC investors indulged in luxury goods like Lamborghinis is shifting.
Recent research shows that crypto millionaires are investing their newfound wealth in real estate, suggesting a more sophisticated spending pattern.
According to a study involving renowned institutions including Brigham Young University, Northwestern University, and Imperial College London, the growth in crypto asset wealth has had a significant impact on the U.S. real estate market.
The study, which used data from 60 million people over 13 years, showed that for every dollar of unrealized gains in crypto assets, about 9 cents was spent on household spending.
While social media often glorifies lavish spending on luxury cars and jewelry, the actual economic impact of crypto wealth is more subtle.
The study highlights that Crypto asset millionaires tend to invest in housing, which is similar to traditional stock investments rather than fleeting lottery winnings.
Darren Aiello, assistant professor of finance at BYU, noted: “Our estimates suggest that household spending of crypto asset earnings is more in line with the pattern of traditional stock investments.”
This trend was particularly evident in 2017, when BTC surged from around $950 to $14,000.
Researchers found that in areas with high Crypto asset participation, home prices rose significantly faster than in areas with fewer Crypto asset centers. Specifically, homes in these Crypto asset-rich counties appreciated an additional 43 basis points over a 12-month period.
Additionally, a separate analysis of withdrawals from crypto asset brokers showed that large withdrawals led to increased housing spending shortly thereafter.
Jason Kotter, another finance professor at BYU, shared: “One out of every 20 households that withdraw $5,000 from their Crypto asset exchange accounts is using it to buy a house.”
BTC millionaires’ shift toward real estate investing reflects a strategic approach to wealth management that diverges from the stereotype of frivolous spending.