2024

Gains

<p>Cryptocurrencies are transforming the lives of modest households. A recent study by the U.S. Treasury reveals a spectacular increase in mortgage loans thanks to crypto gains. A trend that brings hope, but also risks!</p>
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     <p lang="en" dir="ltr">A new OFR Brief examines the relationship between crypto exposure and the increase in household debt since the COVID-19 pandemic.<a href="https://t.co/0h1aCfqhFh" rel="noopener noreferrer nofollow">https://t.co/0h1aCfqhFh</a></p>— Office of Financial Research (OFR) (@OFRgov) <a href="https://twitter.com/OFRgov/status/1861423032532713841?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">November 26, 2024</a>
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  Mortgage loans increase thanks to crypto gains
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<h2 id="h-crypto-gains-boost-mortgages-for-modest-households">Crypto gains boost mortgages for modest households</h2>
<p>According to <strong>a study by the U.S. Treasury</strong>, low-income households in areas highly exposed to cryptocurrencies have seen their mortgage loans increase by 250% between 2020 and 2024. Specifically, the average balance of mortgages rose from $172,000 to $443,000. This increase is supported by higher down payments made possible by crypto gains.</p>
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<p>Researchers note that postal codes with more than 6% of households reporting income related to crypto are the most affected. This phenomenon offers <strong>unprecedented opportunities for home ownership</strong> for these households. However, it raises questions about their debt and economic vulnerability.</p>
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<h2 id="h-another-fact-an-explosion-of-debts-in-areas-exposed-to-cryptocurrencies">Another fact: An explosion of debts in areas exposed to cryptocurrencies</h2>
<p>In addition to mortgage loans, modest households in areas with high exposure to cryptocurrencies also experience a marked increase in their auto loans and other debts.</p>
<p>The <a href="https://www.financialresearch.gov/briefs/files/OFRBrief-24-08-crypto-exposure-and-household-financial-outcomes.pdf" target="_blank" rel="noopener noreferrer nofollow">study</a> indeed highlights <strong>debt-to-income ratios</strong> exceeding recommended thresholds. This could pose problems in the event of an economic slowdown or a collapse of the cryptocurrency market.</p>
<p>Economists therefore issue an important warning: rising crypto debt could <strong>destabilize <a href="https://www.cointribune.com/en/finance-france-in-the-top-10-most-indebted-countries-in-the-world/" target="_blank" rel="noopener noreferrer nofollow">financial markets</a></strong>, especially if these debts are concentrated in systemically important institutions.</p>
<p>Certainly, crypto gains allow many modest households to open up to new opportunities. However, their rising debt requires increased monitoring. The fact is that a weakened economy or a plummeting cryptocurrency market could exacerbate the risks. The future will therefore depend on the stability of the markets and <a href="https://www.cointribune.com/en/the-end-of-crypto-freedom-the-eu-tightens-the-screws-with-strict-measures/" target="_blank" rel="noopener noreferrer nofollow">regulatory measures</a>!</p>

Crypto Gains Are Revolutionizing Real Estate?

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