Today, there are predictions about a possible crash in the U.S. stock market following the announcement that the country’s household wealth has risen above the $100 trillion mark, caused by a rise in value of stocks and properties.
Analysts say this growth is unsustainable. Although it looks good on the surface, the financial experts say there is stagnation in actual U.S. household income, therefore the rate of growth in the markets cannot last for the long-term.
Speaking to Business Insider, AJ Bell investment director Russ Mould stated:
“Household net worth cannot sustainably grow this much faster than incomes. Assets have been bid up and at some stage there has to be chance that they correct, just as happened in 2000 and 2007.”
Mould also talked about the bull market, but said, “the real estate market continuing to increase in value led to an abrupt increase in household wealth. However, if household wealth cannot be backed by stable income, then the market will be vulnerable to a major correction.”
He also added: “The difference is likely to be accounted for by the surge in the value of financial and other assets — equities, bonds, property and frankly everything from vintage cars to art to wine to baseball cards. And this is one warning that at some stage another collapse in financial markets will sweep around the globe.”
Good news for bitcoin and cryptocurrency?
According to CCN.com, a U.S. market crash could have positive effects on bitcoin. It says: “Considering the increasing demand for Bitcoin from millennials, with surveys finding that over one third of millennials are planning to invest in cryptocurrency within the next few years and 80 percent of American millennials already aware of Bitcoin, it is highly likely that if a financial crisis occurs in the near future as experts predict, Bitcoin will emerge as a viable store of value alongside gold.”