Meme Coins and Macro: U.S. Credit Card Holders Face Most Stress Since 2012
Crypto News– The financial strain on U.S. consumers is intensifying as they struggle more with managing credit card loan payments, painting a challenging economic picture exacerbated by speculative activities in less serious assets like meme coins.
According to recent data from the New York Federal Reserve, the percentage of credit card loans in serious delinquency, with balances unpaid for over 90 days, rose to 10.69% in the first quarter. This marks the highest level since the second quarter of 2012. Despite a $14 billion decline in balances to $1.12 trillion during the first quarter, the outstanding balances are still 13.1% higher compared to the previous year.
Austan Goolsbee, president of the Chicago Federal Reserve Bank, highlighted earlier this year that cracks in consumer finances are among the most worrying economic indicators. He noted that such indicators often precede more significant economic downturns, indicating potential worsening conditions ahead.
Highest U.S. Credit Card Holder Stress Levels Since 2012
A growing debt burden reduces disposable income and diminishes the willingness to invest in risky assets such as meme coins. According to an article in the American Economic Review by Luigi Guiso, Tullio Jappelli, and Daniele Terlizzese, borrowing constraints often lead individuals to allocate a smaller portion of their wealth to illiquid and high-risk assets.
Interestingly, meme coins, known for their high risk among digital assets, have faced significant pressure over the past four weeks. They have declined more sharply than the market leader bitcoin (BTC). According to Coingecko data, top meme coins like DOGE, SHIB, and WIF have dropped by over 20%, whereas bitcoin has only decreased by 2.4% during the same period.
They do not focus on metrics, tokenomics, fundamental analysis, or technical analysis, as highlighted by Ledger Academy, and instead, they are ‘committed to the projects and communities they invest in.’ Kelly Greer, head of Americas sales at Galaxy, noted that degens are likely to remain active in the market despite increasing levels of debt.
FAQs
Why are U.S. credit card holders experiencing peak stress levels?
U.S. credit card holders are facing peak stress levels primarily due to a significant increase in serious delinquencies, where payments have been overdue for more than 90 days. This financial strain is compounded by high debt levels and economic uncertainties.
How are meme coins connected to the stress among U.S. credit card holders?
The article highlights a correlation between the rise of meme coins, considered high-risk speculative assets, and the financial stress among U.S. credit card holders. As investors engage in speculative activities, they may divert funds from essential financial obligations, exacerbating economic pressures.
For the latest in crypto updates, keep tabs on Crypto Data Space.
Leave a comment