The price of a family home in the US tells two very different stories depending on how it is measured. The comparison of the stories underlines the importance of bitcoin. attractive as a long-term hedge against dollar devaluation, erosion of fiat currency value.
According to Fidelity Digital Assets, a typical American home has gained more than $100,000 since 2020. Such home price appreciation is said to generate a positive wealth effect, an economic phenomenon in which rising home values make homeowners feel richer. Feeling richer, they spend more, borrow more, and boost the economy even if their real income remains unchanged.
But what if the profit is just a mirage?
Price the same house in bitcoin and the narrative changes dramatically. What required over 50 BTC in 2020 now costs just 5 BTC, a 90% decrease.
“What appears to be housing appreciation is more accurately a reflection of an erosion of fiat currency. The problem lies with the unit of account, not the asset itself,” said Zack Wainwright, digital asset research analyst at Fidelity.
