Even if the crypto boom doesn’t crash—your wallet might
🚪 Welcome to the Bitcoin Dream (That’s Not Yours)
Bitcoin is booming again.
Wall Street is buying in. Billionaires are bullish. And yes, someone probably just bought a mansion with crypto.
But here’s the twist.
That mansion?
You might be paying for it—even if you’ve never touched Bitcoin.
That’s the shocking insight from a recent paper by two senior economists at the European Central Bank:
The Distributional Consequences of Bitcoin (2024).
It doesn’t warn that Bitcoin will crash.
It warns what happens if it keeps rising—and why that may be worse.
Table of Contents
🧨 The Real Cost of a “Winning” Bitcoin
Imagine this.
Bitcoin hits $1 million. Or $10 million. Investors cheer. Early adopters get rich.
But where does that money come from?
Not from productivity.
Not from job creation.
And not from thin air.
It comes from you—through reduced spending power, inflated prices, and a shrinking share of real wealth.
Even if you never bought a single coin.
📜 The Promise That Got Lost in Translation
Satoshi Nakamoto launched Bitcoin in 2008.
The goal?
A decentralized digital currency.
Fast. Borderless. Trustless.
But 16 years later…
- It’s still too slow and expensive for everyday use.
- Volatility makes it a terrible unit of account.
- Most people don’t spend it—they just speculate.
Even in El Salvador—where Bitcoin is legal tender—it flopped as a payment method.
The narrative has shifted.
From money… to moonshot.
💰 Scarcity ≠ Value
(Unless You Believe Hard Enough)
Today’s Bitcoin believers don’t talk about payments.
They talk about price.
They compare Bitcoin to gold.
Say it’s “digital scarcity.”
Say it will protect us from inflation.
But here’s the problem:
Gold has industrial uses.
Stocks pay dividends.
Property earns rent.
Bitcoin does none of that.
It doesn’t produce anything. It doesn’t generate income.
Its value is based purely on belief.
And if that belief spreads?
Great for early holders.
Devastating for everyone else.
🧾 The Hidden Redistribution Nobody Sees Coming
Let’s say Bitcoin keeps rising forever. No crash. No fraud.
Still sounds good?
The paper says: hold on.
Here’s why:
When Bitcoin holders get richer, they spend more.
But since Bitcoin doesn’t grow the economy, their spending pushes others out.
Higher consumption. Same supply.
Result? Prices rise.
Resources tighten.
Everyone else gets squeezed.
That’s not a side effect.
That’s the mechanism.
Wealth goes up for the few—and down for everyone else.
👥 A Tale of Two Wallets: Early Birds vs Latecomers
The paper models it simply.
There are:
- Early Birds: bought Bitcoin early.
- Latecomers: buy later, at higher prices.
- Non-Holders: never touch it.
Early Birds sell Bitcoin slowly over time.
Latecomers buy in, thinking they’re investing.
But to fund it, they cut back on consumption or sell other assets.
That money flows to the Early Birds—who use it to buy real-world wealth.
Latecomers?
They hold Bitcoin and less of everything else.
Non-holders?
They feel the inflation, but get none of the gain.
🏗️ The Mansion Metaphor—In Real Terms
Picture this:
You’re saving for a home.
Meanwhile, someone sells Bitcoin they bought in 2013 and uses the profit to outbid you.
You lose the house.
But that’s not all.
If your pension fund buys Bitcoin late in the game?
Your retirement depends on selling it to someone else for even more.
It’s not investment.
It’s musical chairs.
You’re not just losing the game.
You’re funding it.
🏛️ From Crypto to Congress: This Is Political Now
The Bitcoin boom has gone far beyond Reddit and Twitter.
- In 2024, crypto firms spent $119 million lobbying U.S. politicians.
- Donald Trump called Bitcoin “the future” and promised to build a national crypto reserve.
- Robert F. Kennedy Jr. proposed putting the entire U.S. budget on the blockchain.
These aren’t tech demos.
They’re policies.
Funded by crypto money.
Influencing real regulation.
Meanwhile, less than 7% of Americans held crypto in 2023 (Fed data).
But their influence?
Skyrocketing.
🧠 Is There a Bright Side?
Some say Bitcoin could:
- Protect people from inflation.
- Offer alternatives to broken banking systems.
- Democratize access to wealth.
Maybe.
But let’s be honest:
- Early holders dominate the market.
- Ownership is deeply unequal.
- Price rises do not mean prosperity for all.
The paper puts it plainly:
“Even if Bitcoin doesn’t crash, it causes harm.”
The damage just comes quietly.
Through drained savings.
Through lost purchasing power.
Through mansion-shaped holes in your financial future.
🧩 So What Can We Do?
Bitcoin isn’t going away.
But we need to ask better questions:
- Who benefits if Bitcoin keeps rising?
- Who pays for that wealth?
- What happens if pensions, politics, and prices are all tied to belief-driven assets?
This isn’t about being “anti-crypto.”
It’s about seeing the full picture.
Because if the future of money is just a transfer of wealth—
From the many to the first few—
Then we’re not innovating.
We’re regressing.
💬 Let’s Talk About It
Have you invested in Bitcoin?
Do you think it’s fair for newcomers to bear the cost of early gains?
What should governments and central banks do—if anything?
Drop a comment below.
Let’s make the economics of this conversation as public as the price chart.
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