Crypto Bloodbath Should Have Little Effect on US Households: Goldman Sachs

Over the last few weeks, the crypto market lost trillions of dollars in its value, raising fears that it could harm the wider economy. However, economists at Goldman Sachs aren’t concerned about possible effects on US households.

Goldman Sachs Weighs In

Jan Hatzius, a Goldman Sachs economist, estimated that US households hold about one-third the global cryptocurrency market. The bank giant does not believe there will be any significant impact on Americans’ spending habits due to the recent decline in the market.

Although younger men were the most affected by the recent bloodbaths, economists don’t believe this will cause a surge in their labor force participation. Goldman claimed that such a scope is very limited. He cited the fact that this demographic has already returned to pre-pandemic levels. Further, the letter pointed out that

“Taken together, it is likely that tighter financial conditions will result in a sharp slowdown of growth and spending in the year ahead. Furthermore, declines in household wealth could encourage some workers who left the labour market during the pandemic return. The recent drop in cryptocurrency prices is unlikely to have any significant impact on growth.

The Crypto Market Gains Ground

Although the sell-off caused significant pessimism within the crypto market, many experts do not believe that there are any signs of contagion from this dip that could impact the wider economy. Joshua Gans, a University of Toronto economist, recently stated that banks and traditional financial institutions only recently began to explore crypto. The effect of crypto price volatility seems to be very limited, given the limited exposure.

Despite not making a strong comeback, the cryptocurrency market has gained some ground. Bitcoin reached $30,000 this week, its lowest point since late 2020. As the week ended, Ethereum surged above its $2,000 psychological mark.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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