The price of a family home in the U.S. tells two very different stories depending on how it’s measured. Comparing the stories underscores bitcoin’s appeal as a long-term hedge against dollar debasement, the erosion of value in the fiat currency.
According to Fidelity Digital Assets, a typical U.S. house has gained more than $100,000 since 2020. That house-price appreciation is said to generate a positive wealth effect, an economic phenomenon where rising home values make homeowners feel wealthier. Feeling wealthier, they spend more, borrow more and boost the economy even if their actual income remains unchanged.
But what if the gain is just a mirage?
Price the same house in bitcoin and the narrative shifts sharply. What required more than 50 BTC in 2020 now costs just 5 BTC, a 90% decline.
“What appears to be appreciation in housing is more accurately a reflection of an erosion of fiat currency. The issue lies with the unit of account—not the asset itself,” Zack Wainwright, a digital asset research analyst at Fidelity, said.