Why nobody can afford homes or families, and how bitcoin fixes this

We can all sense that something is wrong in the world today. Despite all the material advances and technological feats that would leave people from the past in complete awe, something is awry. Financialization of the world’s economies, massive government debt, cultural decay, a gaping hole in leadership, obesity and health problems, and collapsing birth rates are all posing a threat. It might not seem like bitcoin is related to all these things. But it is. The quality of the money we use is instrumental for a prosperous and ethical society. 

What is bitcoin? Bitcoin is decentralized open source digital money. It is a kind of savings technology for the digital age, though of course you can use it to buy and sell goods and services also. But one key distinction is that it is strictly limited to 21 million coins. With all other forms of money, more can be created. But with bitcoin, instead of more units being created, the value of the bitcoin rises.

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When the powers that be can create money from thin air, either directly, or indirectly through a controlled banking system, it causes problems for us. What the world is going through now is a consequence of government interference in the market for money and banking. Instead of having to explicitly tax citizens and residents, politicians and the state are able to “look like the hero” by promising all sorts of goodies, financed through the magic of the fiat currency printers. This hidden tax of sorts is secretly commandeering resources, and apportioning them to the state, its preferred partners, and people who know how to play the fiat debt game. It dramatically enlarges the size of the state, and clearly it enables corruption that does not benefit the everyday citizen or resident.

Bitcoin is about changing that system, and instead creating an open, strictly scarce monetary system limited to 21 million bitcoins. In a way, it represents definancialization. 

What do I mean by that? Well first we can explore what financialization means. As an example in today’s economy, the prices of necessities such as housing have been bid up so high, that people generally can’t afford to just buy housing outright. Housing became an investable asset, and the name of the game has become leverage. When you put down say, 5-20% of the property value as a down payment for a mortgage, you are effectively levering up on property anywhere from 5-20x your down payment. To be fair, there are some important differences, such as tax advantages and governmental support for people to do this. 

It could also be argued that this is effectively going short fiat currency (i.e. betting that USD or other fiat currencies will continue to devalue). The reasons for this are many but we could summarise by saying this makes your ‘cash on cash’ return higher because of effectively multiplying your exposure to property's upside and the downside of fiat currency. Instead of housing being consumption, housing became a financialized investment.

Now some might think: “That’s all well and good. Just keep the fiat debt party going!”. The trouble comes when there are now younger generations who are struggling to own a home because the property prices are simply much higher as a multiple of household income.

As a quick example with back of the envelope numbers, median American household income in 1980 was about $21,000 per US Census.

The median American home was about $64,000. So let’s call that about a 3x multiple of household income. 

What do those numbers look like today in 2024? The median home sales price in the USA today is about $416,900 as of Q1 2025 per FRED.

Median US household income was $80,610 in 2023. So that’s about a 5.2x multiple of household income. Of course, this picture gets worse if you examine specific cities and higher end property markets such as San Francisco, New York, Vancouver, Hong Kong, etc. In San Francisco the median income is $125,456 and the median home price is $1,550,000, making for a multiple of 12.3x.

So what are the human consequences of this? It is harder for young people to buy homes, get married, and start families, which means the age of marriage and having children gets pushed back. US Total Fertility Rate has fallen to 1.61 as of 2023.

Bringing it back to definancialization, bitcoin helps right what fiat money put wrong. Because the government artificially makes fiat credit cheap, housing is being seen as something to lever up on. Housing and development have become highly regulated and constricted markets, which in turn makes it harder to build new supply. We should expect that entrepreneurs in a true free market would act to create more housing supply given the need. Instead of turning housing into such a highly levered market, it could be made more affordable under a sound money standard. To be fair, there will be certain premium housing markets or types of property that could rise over time because of their location, e.g. desirable luxury beachfront property or downtown real estate. But the trend on a bitcoin standard would not be what it is today under a fiat standard. 

Future posts will explore other topics, such as the state of government debt, and the cultural consequences of fiat money. But make sure you stay in touch to stay up to date on how we're assessing the future of money and what it means for us as this bitcoin thing catches on.

Stephan Livera for Bold

• Earn up to 10% bitcoin-back with the Bold virtual Visa debit card.
• Get the industry's lowest fees on bitcoin buys and sells.
• Store and move dollars with the Bold checking account*.
• Get $25 of free bitcoin when you buy $100 of BTC or more.
• Pay zero fees on your first $10,000 of buys.

*Bold is a financial technology company, not a bank. Banking services are provided through JPMorgan Chase Bank, N.A., and Pathward, N.A.; Members FDIC.