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Crypto prices correlated to young male employment: Goldman Sachs

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Yahoo Finance Live’s Brad Smith and Brian Cheung break down a report conducted by Goldman Sachs that found that crypto prices are correlated to young male employment.

Video Transcript

- Well, a new report from Goldman Sachs is shedding some insight about the demographic of crypto traders.

BRIAN CHEUNG: Well--

- Brian.

BRIAN CHEUNG: Yeah, this was a hilarious report and I love it because the whole essence, to keep in the theme of what we were just talking about, is essentially that the US economy is GMI, it's going to make it despite the spill that we've seen in crypto. Because the question is-- there is a large wealth effect that's coming from the large depreciation that we've seen in assets across the board. So it raises the question, well, if a bunch of people are losing a lot of money on crypto, what is that going to do?

So Goldman Sachs said, first of all, the share of crypto that's held by US households is relatively small, so that's kind of a negligible effect. But they went a little further and asked, what's going to happen to employment among some of these degens on Reddit that put a lot of money into crypto, they tried to get rich quick, maybe they quit their job because they got rich quick.

- They got rich quick.

BRIAN CHEUNG: So if they lose a lot of money from those same cryptos, are they then going to go look for jobs? It's an interesting question.

- There's a lot of knock on effects you can talk about with crypto. And the housing market is in another one.

BRIAN CHEUNG: Housing markets another one.

- Right. I mean, all of these people who got rich quick, not only potentially quit their jobs, they went out and invested, but, you know, whether it's artwork or homes, I mean, that ripple effect is a real thing.

BRIAN CHEUNG: And the chart that we're showing right now shows you the male labor force participation. This is something that Goldman Sachs highlighted in that note that they published yesterday. And that is because the largest demographic most likely to be invested or using cryptocurrencies are males. And it shows that actually the pre-pandemic trend has kind of come back already, so maybe it was a negligible effect during this recovery for that demographic to leave the labor force because they made it-- you know, made so much money on crypto, which means that they said, if anything, it's going to be a kind of limited effect of having people come back into the labor force if these crypto declines are, you know, incentivizing some to try to go and look for a job again.

But you mentioned, home prices might be the larger impact. That's something that Goldman Sachs hasn't addressed, at least, in this paper. But we'll see if they do address that at some point in the future. But again, the overall sentiment from Goldman Sachs that despite crypto spilling and terra exploding, WAGMI, we're all going to make it.

- It would be interesting to see where they go look for jobs. I can't imagine--

BRIAN CHEUNG: The joke is McDonald's. The joke is McDonald's, but, you know, there's a lot of other jobs out there.

- Yeah. Yeah. Yeah.