Plummeting Household Savings Threaten US Retail Crypto Investments
Household savings in the United States have been steadily declining for the past 23 months, leaving less disposable cash for retail crypto investments. Excess savings in the US have been falling by $100 billion per month since 2022, with current estimates putting savings at just $190 billion. The US central bank predicts that remaining household savings will be depleted by the end of the year. As consumer spending increases and people dip into their savings, bigger debts are likely to accumulate. With credit card borrowing costs at record highs and banks tightening lending standards, US retail investors will have less cash available for high-risk assets like crypto. This could prolong the crypto winter unless other regions, such as Asia, provide a boost.
Main Points:
- US household savings have been declining for 23 consecutive months.
- Savings have been falling by $100 billion per month since 2022.
- Current estimates put savings at just $190 billion.
- Consumer spending is increasing, leading to bigger debts.
- Credit card borrowing costs are at record highs, limiting cash available for crypto investments.
Hot Take:
The decline in household savings in the US poses a significant threat to the retail crypto market. With less cash available for investments and increasing debts, the recovery of the crypto market may be delayed until other regions, such as Asia, provide a boost. The tightening lending standards and high credit card borrowing costs further exacerbate the situation. US retail investors should be cautious and consider alternative investment strategies until the savings trend reverses.
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