A man sits on a Wall Street bull near the New York Stock Exchange (NYSE) on November 24, 2020 in New York City.
Spencer Platt | Getty Images
The booming stock market and crypto profits created more than a million new US millionaires last year, according to a new report.
The number of Americans with $1 million or more in investable assets rose to a record 14.6 million in 2021, up from 13.3 million in 2020, according to a report from research firm Spectrem Group.
Growth rates of over 10% were the highest in recent years, fueled by the trillions of dollars of wealth created by the stock market, cryptocurrencies and other assets.
“This has been the strongest year for making millionaires across all segments,” said George Wolper, president of Spectrem Group.
The splash of wealth was strongest at the top. The number of Americans worth $25 million or more increased by 18%. There are now a record 252,000 Americans worth $25 million or more, up from 214,000 in 2020. In contrast, the number of so-called “mass rich” investors – or those with between $100,000 and $1 million – has grown by about 2%.
The stock market has by far been the biggest wealth creation engine for the millionaires and rich in 2021. Last year, the S&P 500 was up 27% and the Nasdaq was up 21%. The top 1% of Americans earned more than $3 trillion in the stock market in 2021, according to the Federal Reserve.
Cryptocurrency and other assets such as NFTs, collectibles and real estate have also risen in value, adding to the wealth of the wealthy. According to CoinGecko, the total market capitalization of crypto assets, despite wild price fluctuations, grew by $1.5 trillion last year and exceeded $2.3 trillion.
The value of private equity and venture capital investments has also risen. Because the rich can afford to put more of their money into investments, especially those with the highest risks and rewards, ultramillionaires have won more than the mass rich in 2021.
“The rich have the most access to the widest investments,” Wolper said. “It wasn’t just the traditional liquid markets that performed well last year. It was also alternative investments, investments in real estate and cryptocurrencies.”
Wealth gains at the top also widened the wealth gap in the US. The share of wealth held by the top 1% rose to a record 32% last year, according to the Fed.
Wealth experts say it’s unlikely that last year’s gains will continue into 2022 given soaring inflation, rising interest rates and a potential slowdown in economic growth. The fall of the stock market has already begun to reduce the paper fortunes of investors. The Nasdaq is down 14.5% for the year and the S&P is down 8.4%.
“Every day changes, so it’s hard to predict how the year will end,” Wolper said. “But the first few months of 2022 have already painted a different picture than 2021.”