By Senad Karaahmetovic
The global market for cryptocurrencies has lost around 1 trillion during the most recent selloff that saw Bitcoin (BTC) prices lose almost 60% in value since November.
Goldman Sachs’ Jan Hatzius has analyzed the impact of lower crypto prices on the US economy. They calculate that US households own about one-third of the global crypto market. This means that the decline in crypto prices is “very small relative to US household net worth, which stood at $150tn as of last year.”
“We therefore expect any drag on aggregate spending from the recent declines in cryptocurrency prices to be very small as well,” Hatzius said in a client note.
Similarly, the Chief Economist at Goldman Sachs also sees “very limited scope for an increase in labor force participation due to crypto price declines.”
Overall, Hatzius continues to expect that the US will experience a sharp slowdown in growth and spending this year.