The price of a family home in the United States tells two very different stories depending on how it is measured. Comparing Stories Highlights Bitcoin attractive as a long-term hedge against the depreciation of the dollar, the erosion of the value of fiat currency.
According to Fidelity Digital Assets, a typical American home has gained more than $100,000 since 2020. This home price appreciation would generate a positive wealth effect, an economic phenomenon in which rising home values make homeowners feel wealthier. Feeling richer, they spend more, borrow more and stimulate the economy even if their real incomes remain unchanged.
What if the gain was just a mirage?
Price the same house in Bitcoin and the narrative abruptly changes. What required more than 50 BTC in 2020 now costs just 5 BTC, a drop of 90%.
“What appears to be an appreciation in housing is more accurately a reflection of an erosion of fiat currency. The problem lies in the unit of account, not the asset itself,” said Zack Wainwright, digital assets research analyst at Fidelity.
