Throughout his administration, President Trump has boasted that his pro-business stance rejuvenated both the economy and the stock market. At the end of 2017, his trademark bravado has proven correct. The benchmark Dow Jones Industrial Average gained 24.4% last year, while the unemployment rate steadily declined from 4.8% to 4.1%.
By almost any context (setting aside the common criticism that government statistics are fudged), such numbers would be considered an unqualified success. However, CNN Money reported last month that very few among low-income earners participated in the stock market. Logically, this means that the people benefitting most from the rally are higher-income earners.
Lydia DePillis of CNN Money writes: “As measured by those who declare ordinary dividend income on their tax returns, stock ownership varies dramatically by income level. Among filers who make less than $25,000 a year, only about 8% own stocks. Meanwhile, 88% of those making more than $1 million are in the market, which explains why the rising stock market tracks with increasing levels of inequality.”
In sharp contrast, the blockchain, or more specifically, the cryptocurrency markets, reverse wealth disparity. For starters, the demographic between cryptocurrency and stock market participation are almost completely the opposite. Older folks who have been ingrained into the system utilize equities as a major component of their retirement planning, as I explained in my last Crush The Street post. However, the younger demo embraces the blockchain.
In that article, I cite a cryptocurrency participation survey which revealed that 16.5% of bitcoin users are between the ages of 19 to 24. This demo includes people who are just out of high school and have yet to enter a career job opportunity. In other words, this segment of the population would very much fall into those making less than $25,000 a year, yet their participation in the blockchain doubles that of the participation in the stock market.
Many would counterargue that valuation increases come from the rich, not from the poor. That’s true to many extents. However, the cryptocurrency market is unlike the stock market in that the former runs 24 hours a day in a decentralized platform. The latter has an arbitrarily regimented schedule, and is prone to “extrajudicial” regulation, ie. the plunge-protection team.
The accelerated-time platform is one of my biggest arguments for the cryptocurrency markets because it provides the fuel for extraordinary gains in a relatively short period. To earn a million dollars in your 401k plan requires steady returns in the stock market, as well as consistent contributions and lengthy time for compounding interest to work its magic. As you know, we’ve seen radical profitability take place in a matter of months, not decades.
What this ultimately entails is that the low-income earner doesn’t have to live in the controlled slavery of the fiat economy. Instead, they can dramatically improve their lot in life by participating in the only truly free markets available.