U.S. household debt just hit $18T, mortgage rates are brutal, and Bitcoin’s supply crunch is intensifying. Is the old path to wealth breaking down?
Real estate is slowing — fast
For years, real estate has been one of the most dependable ways to build wealth. Home values generally rise over time, and property ownership has long been considered a safe investment.
But right now, the housing market is showing signs of a slowdown unlike anything seen in years. Homes are sitting on the market longer. Sellers are cutting prices. Buyers are struggling with high mortgage rates.
According to recent data, the average home is now selling for 1.8% below asking price — the biggest discount in nearly two years. Meanwhile, the time it takes to sell a typical home has stretched to 56 days, marking the longest wait in five years.
In Florida, the slowdown is even more pronounced. In cities like Miami and Fort Lauderdale, over 60% of listings have remained unsold for more than two months. Some homes in the state are selling for as much as 5% below their listed price — the steepest discount in the country.
At the same time, Bitcoin (BTC) is becoming an increasingly attractive alternative for investors seeking a scarce, valuable asset.
BTC recently hit an all-time high of $109,114 before pulling back to $95,850 as of Feb. 19. Even with the dip, BTC is still up over 83% in the past year, driven by surging institutional demand.
So, as real estate becomes harder to sell and more expensive to own, could Bitcoin emerge as the ultimate store of value? Let’s find out.
From scarcity hedge to liquidity trap
The housing market is experiencing a sharp slowdown, weighed down by high mortgage rates, inflated home prices, and declining liquidity.
The average 30-year mortgage rate remains high at 6.96%, a stark contrast to the 3%–5% rates common before the pandemic.
Meanwhile, the median U.S. home-sale price has risen 4% year-over-year, but this increase hasn’t translated into a stronger market—affordability pressures have kept demand subdued.
Several key trends highlight this shift:
- The median time for a home to go under contract has jumped to 34 days, a sharp increase from previous years, signaling a cooling market.
- A full 54.6% of homes are now selling below their list price, a level not seen in years, while just 26.5% are selling above. Sellers are increasingly forced to adjust their expectations as buyers gain more leverage.
- The median sale-to-list price ratio has fallen to 0.990, reflecting stronger buyer negotiations and a decline in seller power.
Not all homes, however, are affected equally. Properties in prime locations and move-in-ready condition continue to attract buyers, while those in less desirable areas or requiring renovations are facing steep discounts.
But with borrowing costs surging, the housing market has become far less liquid. Many potential sellers are unwilling to part with their low fixed-rate mortgages, while buyers struggle with higher monthly payments.
This lack of liquidity is a fundamental weakness. Unlike Bitcoin, which can be traded 24/7 with near-instant execution, real estate transactions are slow, expensive, and often take months to finalize.
As economic uncertainty lingers and capital seeks more efficient stores of value, the barriers to entry and sluggish liquidity of real estate are becoming major disadvantages.
Too many homes, too few coins
While the housing market struggles with rising inventory and weakening liquidity, Bitcoin is experiencing the opposite — a supply squeeze that is fueling institutional demand.
Unlike real estate, which is influenced by debt cycles, market conditions, and ongoing development that expands supply, Bitcoin’s total supply is permanently capped at 21 million.
Bitcoin’s absolute scarcity is now colliding with surging demand, particularly from institutional investors, strengthening Bitcoin’s role as a long-term store of value.
The approval of spot Bitcoin ETFs in early 2024 triggered a massive wave of institutional inflows, dramatically shifting the supply-demand balance.
Since their launch, these ETFs have attracted over $40 billion in net inflows, with financial giants like BlackRock, Grayscale, and Fidelity controlling the majority of holdings.
The demand surge has absorbed Bitcoin at an unprecedented rate, with daily ETF purchases ranging from 1,000 to 3,000 BTC — far exceeding the roughly 500 new coins mined each day. This growing supply deficit is making Bitcoin increasingly scarce in the open market.
At the same time, Bitcoin exchange reserves have dropped to 2.5 million BTC, the lowest level in three years. More investors are withdrawing their holdings from exchanges, signaling strong conviction in Bitcoin’s long-term potential rather than treating it as a short-term trade.
Further reinforcing this trend, long-term holders continue to dominate supply. As of December 2023, 71% of all Bitcoin had remained untouched for over a year, highlighting deep investor commitment.
While this figure has slightly declined to 62% as of Feb. 18, the broader trend points to Bitcoin becoming an increasingly tightly held asset over time.
The flippening isn’t coming — it’s here
As of January 2025, the median U.S. home-sale price stands at $350,667, with mortgage rates hovering near 7%. This combination has pushed monthly mortgage payments to record highs, making homeownership increasingly unattainable for younger generations.
To put this into perspective:
- A 20% down payment on a median-priced home now exceeds $70,000—a figure that, in many cities, surpasses the total home price of previous decades.
- First-time homebuyers now represent just 24% of total buyers, a historic low compared to the long-term average of 40%–50%.
- Total U.S. household debt has surged to $18.04 trillion, with mortgage balances accounting for 70% of the total—reflecting the growing financial burden of homeownership.
Meanwhile, Bitcoin has outperformed real estate over the past decade, boasting a compound annual growth rate (CAGR) of 102.36% since 2011—compared to housing’s 5.5% CAGR over the same period.
But beyond returns, a deeper generational shift is unfolding. Millennials and Gen Z, raised in a digital-first world, see traditional financial systems as slow, rigid, and outdated.
The idea of owning a decentralized, borderless asset like Bitcoin is far more appealing than being tied to a 30-year mortgage with unpredictable property taxes, insurance costs, and maintenance expenses.
Surveys suggest that younger investors increasingly prioritize financial flexibility and mobility over homeownership. Many prefer renting and keeping their assets liquid rather than committing to the illiquidity of real estate.
Bitcoin’s portability, round-the-clock trading, and resistance to censorship align perfectly with this mindset.
Does this mean real estate is becoming obsolete? Not entirely. It remains a hedge against inflation and a valuable asset in high-demand areas.
But the inefficiencies of the housing market — combined with Bitcoin’s growing institutional acceptance — are reshaping investment preferences. For the first time in history, a digital asset is competing directly with physical real estate as a long-term store of value.
The question is no longer whether Bitcoin is an alternative to real estate — it’s how quickly investors will adjust to this new reality.
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