The United States economy is increasingly divided between those who own appreciating assets and those who rely solely on income and cash savings, according to analysis from the Kobeissi Letter.
With roughly 134.8 million households in the country, the wealthiest 1%—approximately 1.4 million households—control more than $60 trillion in net worth. Since 2020 alone, their wealth has grown by more than $30 trillion. By contrast, the bottom 50% of households, or 67.4 million families, collectively hold a fraction of that amount.
The divide stems largely from asset ownership rather than salary differences. Total US household wealth has expanded from roughly $101 trillion six years ago to $185 trillion today, but this growth has been distributed unevenly. Those who already owned stocks, businesses, property, and other appreciating assets benefited disproportionately as prices rose.
Meanwhile, inflation has eroded the purchasing power of cash savings. The dollar has lost roughly 23% of its purchasing power since 2020, and inflation has remained above the Federal Reserve's 2% target for 60 consecutive months. Essential expenses including food, housing, and transportation have become more expensive, while assets capable of preserving wealth—homes and stocks—have become harder to afford. Mortgage rates have climbed toward the mid-7% range, further raising barriers to homeownership.
Bitcoin's Limited Role
Bitcoin addresses one aspect of this economic dynamic: its supply cannot expand in response to government spending, deficits, or monetary policy. A maximum of 21 million units will ever exist, making it fundamentally different from traditional currency, whose purchasing power declines as the monetary base expands.
Bitcoin is also more accessible than many traditional wealth-building assets. Unlike homeownership, which requires a substantial down payment, or stock ownership, which may require significant capital, fractional bitcoin ownership is available to most investors.
However, bitcoin's extreme volatility presents significant risks for inexperienced investors. The asset can lose 50% or more of its value during severe downturns spanning just months. Additionally, holding bitcoin generates no cash flow and offers limited help to individuals whose income is consumed by rent, food, healthcare, and debt.
Bitcoin cannot make housing more affordable, raise real wages, reduce healthcare costs, or redistribute existing wealth. While it provides individuals with another avenue to participate in asset ownership—an increasingly important factor in wealth preservation—it cannot rebuild the middle class on its own.
