Why might Americans be unable to afford cryptocurrencies by 2026?

US economic data is sending early warning signals for risk assets and cryptocurrencies. The latest labor market data shows that by 2026, household income growth may slow down.

This trend could reduce retail investment inflows, especially into more volatile assets such as cryptocurrencies. In the short term, this creates a demand issue rather than a structural crisis.

US labor data shows slowdown in disposable income growth

This latest non-farm payroll report shows sluggish job growth and a rising unemployment rate. Wage growth is also slowing, indicating that household income momentum is weakening.

Disposable income is an important factor affecting cryptocurrency adoption. Retail investors typically allocate surplus cash (rather than leverage) to risk assets.

When wages stagnate and job security weakens, households first cut discretionary spending. Speculative investments usually fall into this category.

Retail investors face the greatest risk, with altcoins likely to be hit first.

Compared to the bitcoin market, retail participation plays a more important role in the altcoin market. Smaller tokens are heavily dependent on retail discretionary funds seeking higher returns.

In contrast, bitcoin attracts more institutional investors, ETFs, and long-term holders. This makes it more liquid, with greater downside risk.

If Americans have less money available for investment, altcoins are often the first to suffer losses. Liquidity dries up faster and price declines last longer.

Retail investors may also be forced to close positions to pay related fees. This selling pressure has a greater impact on tokens with smaller market caps.

Lower income does not mean lower prices, but it does change the driving factors.

Even if income falls, asset prices may still rise. This usually happens when monetary policy becomes more accommodative.

A cooling labor market gives the Federal Reserve room to cut interest rates. Rate cuts can boost asset prices by increasing liquidity rather than stimulating household demand.

For cryptocurrencies, this distinction is crucial. Liquidity-driven rallies are more fragile and more susceptible to macroeconomic shocks.

Institutions themselves also face resistance from Japan

Weak retail is only part of the problem. Institutional investors are also becoming more cautious.

This potential rate hike by the Bank of Japan threatens global liquidity conditions. It could unwind the yen carry trades that have supported risk assets for years.

When Japanese borrowing costs rise, institutions typically reduce their global investment exposure. Cryptocurrencies, stocks, and credit markets will all be affected.

The main risk is not a crash, but weak demand. As income growth slows, retail investors may reduce their investments. As global liquidity tightens, institutional investors may also pause investments.

In this environment, altcoins remain the most vulnerable. Bitcoin is more resilient to economic slowdowns.

At present, the cryptocurrency market appears to be undergoing a transformation, shifting from a retail-driven rally to a more cautious, macro-driven stance.

This shift could shape the first few months of 2026.