Housing Shortage Drives Young Americans Toward Cryptocurrency Investments: Research

A recent study indicates that an increasing number of young Americans are engaging with cryptocurrency not as a matter of ideology, but rather as a financial risk motivated by frustration over housing expenses.

Key Takeaways:

• Young Americans are turning to crypto due to financial hardship as housing becomes more unaffordable.
• Researchers note that “discouraged renters” substitute saving with high-risk investments when homeownership seems unattainable.
• Over time, this transition confines many to a state of near-zero wealth while aspiring homeowners continue to accumulate assets.

The report contends that escalating home prices have altered the financial perspectives of an entire generation regarding money, risk, and opportunity.

US Homeownership Becomes Elusive, Driving Youth Toward Risky Investments

Researchers discovered that the median house price-to-income ratio in the US has increased so dramatically since the 1980s that today’s young adults would require nearly two additional years of income to purchase the same home their parents could afford.

As the dream of homeownership diminishes, financial behaviors change correspondingly. Instead of saving for a down payment, many individuals turn to unstable assets that present a chance for a sudden increase in wealth.

“Crypto becomes a substitute for the American Dream,” the authors state, characterizing digital assets as instruments for high-risk, high-reward speculation when traditional aspirations seem out of reach.

Rather than demonstrating confidence in decentralization or skepticism toward banks, participation in crypto is increasingly viewed as a coping mechanism for a disrupted path to stability.

The research identifies a critical point termed “discouraged renters.” Once individuals determine that homeownership is no longer feasible, their financial behaviors undergo lasting changes.

In comparison to homeowners with similar net worth, discouraged renters incur approximately 10% more in credit card expenditures and are significantly more likely to withdraw from long-term career goals.

The US housing bubble burst in 2007-08, leading to a significant financial crisis.
What did the US do afterward? It inflated another housing bubble, which is even larger now.
Because the US economy is a financialized house of cards built on asset price bubbles.https://t.co/Fr54cJmTk9 pic.twitter.com/JLHPzPozTE

— Ben Norton (@BenjaminNorton) November 30, 2025

The study connects this mentality to the increasing trend of “quiet quitting,” where employees remain in their jobs but are emotionally disengaged.

Wealth levels also influence how individuals engage with crypto. Renters possessing between $50,000 and $300,000 in assets exhibit the highest levels of participation, falling into what the report refers to as a no-man’s-land: too creditworthy to abandon, yet too financially constrained to purchase property.

For those with less than $50,000, investment nearly vanishes, not due to a lack of interest, but because of insufficient funds.

Crypto, the report observes, becomes a “last-chance lever,” a means to attempt to overcome a system that no longer appears equitable.

Welfare programs mitigate the impact of failure, promoting high-risk endeavors with limited downside.

However, the long-term outlook is grim. Over time, discouraged renters become trapped in what the study describes as a near-zero wealth cycle, while those who maintain hope for homeownership continue to build capital.

Global Housing Crisis Drives Youth From Saving to Crypto Speculation

Young individuals in South Korea and Japan exhibit similar disengagement under the pressure of housing inflation, and both nations have rapidly expanding crypto communities.

The researchers conclude that this trend is global. When housing becomes unattainable, speculation supplants saving.

In March, the US Department of Housing and Urban Development (HUD) announced that it is investigating the potential application of blockchain and stablecoins to enhance certain operational functions.

Officials also discussed a pilot initiative where a HUD grantee would receive payments via stablecoin, with the program initially being tested in a single department before broader rollout.

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