Millennials are banking on bitcoin to get rich!

Millennials are getting poorer and poorer. The misappropriation of wealth by central banks has caused real estate prices to explode, for the benefit of boomers. Faced with this unfair situation, will millennials bet everything on bitcoin to hope to be able to buy a house?

A generation sacrificed

Bitcoin symbolizes hope for a generation that increasingly has the impression that his future has been stolen from him by the traditional fiduciary system.

It is no secret that younger generations increasingly feel like they are falling behind. Millennials are facing an affordability crisis. They are about to be the first generation not to surpass their parents in terms of professional status and income.

Lack of financial security could be one of the most important factors in negative feeling felt by younger generations today.

The millennial generation has already experienced two global financial crises since entering the job market. They were just starting to accumulate savings while the Federal Reserve was driving asset prices up to the moon with its accommodative policies. Instead of benefiting from asset appreciation, most millennials have been left behind.

Millennials are most likely to believe that the current regime is fundamentally failing and must be revised, if not entirely replaced. Young people no longer have hope today. They don't feel like there is a future.

The end of the American dream

Homeownership is often considered the cornerstone of the American dream. This is how households have historically built generational wealth and have the space to start a family and create a legacy. Homeownership is deeply ingrained in the American psyche as a symbol of stability and success.

Today, due to the policies of central banks and governments, homeownership affordability is at its lowest level in history.

This is the result of a combination of two things:

• The surge in real estate prices stimulated by money printing, in the wake of the 2008 global financial crisis
• The 2022 interest rate hike by the Federal Reserve to fight galloping inflation

Over the past decade, the Federal Reserve has made massive quantitative easing, buying billions in mortgage-backed securities, and housing prices skyrocketed almost at the same time.

The Fed serving boomers

For older generations who already owned homes, this was fantastic. Lhe central bankers have inflated the value of their homes (and their assets) without having to lift a finger.

But for millennials who were still looking to buy their first home after entering the workforce, it was a disaster.

The Federal Reserve was directly complicit in the fact that the American dream of homeownership has been put out of reach for a large portion of millennials.

The data bears this out when we compare millennials’ homeownership to that of previous generations. Millennials are the slowest to move from renting to owning.

By the age of 30, 42% of millennials owned their home, compared to 48% of Generation X and 51% of baby boomers.

Millennials: no house, no kids

Millennials have been forced to become a tenants due to the high cost of homeownership today. This has a significant impact on their ability to build long-term assets.

Home ownership is not just a way to build wealth. A British study looked at data spanning several decades and found that over the past 30 years, owning a home has always been linked to a higher probability of having a first child than renters.

This corroborates a recent trend we have witnessed: the rapid decline in fertility and birth rates. Millennials just don't no children like previous generations.

Instead of starting a family and becoming a homeowner – two crucial steps for financial success and long-term fulfillment – young people return to live with their parents.

According to a recent Bloomberg study, 50% of people aged 18 to 29 now live with their parents and cite financial difficulties as the main reason why they decide to move back in with their parents.

The young people return living with their parents to try to save money to one day own a home. But they risk being disappointed by the length of their stay.

Today, it is estimated that purchasing an average-priced home requires nearly 7 years of savings for an average income. To put this into perspective, it took 2.4 years of time and work to save the cost of an average house in 1970.

The Fed plundered the millennials

Young people return to live with their parents instead of trying to start a family because the cost of living has exploded.

Inflationary policies have not only made housing unaffordable, but they have also increased the cost of basic necessities such as food, healthcare, education and transportation. FRaising a family and providing for them has never been more expensive than it is today.

This is partly explained by the stagnation of nominal wages. If we compare median income and median wealth between generations at age 40, we see that salaries have not changed for millennials, while median wealth has decreased and median debt has soared.

Millennials increasingly in debt

If we take inflation into account, the situation gets worse. We see that wage stagnation has been a constant trend for decades. A 2018 Pew study showed that wages may have increased nominally, but that they have not changed much in terms of purchasing power.

So while wages have fallen, the cost of everything millennials need, like health care, education and housing, has soared.

Millennials have therefore gone into debt more than any other generation before them, by contracting student loans, car loans, mortgage loans and credit cards to try to make ends meet.

Total debt for households aged 30 to 39 has increased by 27% since 2019. This is the fastest pace of debt accumulation over a three-year period since the 2008 financial crisis.

Millennials are taking on more and more debt todesperately trying to realize the American dream that is increasingly eluding them.

Bitcoin hope?

A viable option is to invest in an asset likely to appreciate significantly over the coming decade.

This would allow millennials to finally feel like they've caught up and, if assets outpace inflation and house prices, it could improve their quality of life and allow them to finally buy a house.

Bitcoin is an asset with a relatively low market capitalization. It is still early in its adoption cycle, but if network adoption continues on its current trajectory, bitcoin will command a higher, if not much higher, price.

Since the offer is set at 21 million, the more users who join the network, the more the price of bitcoin increases. With the supply of bitcoin frozen, only the demand side of the equation matters, and demand for a rare, censorship-resistant, private, and digital monetary good appears to be increasing.

The only asset to hope to have a house

Bitcoin is considered a “asymmetric bet” in the world of investment. An asymmetric bet is an investment whose upside gain is greater than the potential downside loss. In other words, it is possible to invest a little to get a big return.

Bitcoin's journey is impressive. It has outperformed almost every asset class over long periods of time. The Compound Annual Growth Rate of Bitcoin far exceeds that of other asset classes like gold and the S&P 500 over long periods of time.

Not only is the potential return on investment attractive to millennials, but the beauty of bitcoin is that they don't need to get a mortgage to buy it.

Young people do not need to buy a whole bitcoin, they can buy a fraction of it. And they can own bitcoins without any debt. For many millennials, bitcoin could be a way to build wealth when all other solutions seem out of reach.

And that’s where millennials find themselves today. The fiat system has brought them two recessions, stagnant wages, artificially inflated housing prices, and huge debt loads to cope with the soaring costs of basic necessities such as health care, food, energy, education and transport. Bitcoin represents an opportunity to improve the well-being of this generation that has been mistreated. As such, bitcoin symbolizes hope for a generation that increasingly feels like its future has been stolen from them by the traditional monetary system.