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Which Industry Boasts the Most Billionaire Wealth?

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which industry boasts the most billionaire wealth

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which industry boasts the most billionaire wealth

The Briefing

  • In every single sector, billionaire wealth saw positive growth from 2019 to 2020
  • Billionaire wealth in technology reached $566 billion after growing 41%, while healthcare reached $548 billion, growing 36%

It’s a Billionaires World

During the pandemic, billionaire wealth has shot up an average of 27% across various industries. Concurrently, the middle and working class have struggled, U.S. unemployment reached record highs, and millions of Americans are worried about facing eviction or foreclosure in the near future.

Tech and Healthcare Pull Ahead of the Pack

The industries that historically promote wealth creation for billionaires have undergone a number of changes in recent times.

Technology and healthcare have surged ahead of the pack, as companies in these industries possess qualities that have made innovation a huge value and growth driver. Innovative factors include AI, big data analytics, and a digital and cloud footprint.

IndustryWealth Per Industry ($ Billions)Growth Rates between April-July 2020
Technology$565.741.1%
Health industries$548.036.3%
Industrials$376.944.4%
Real estate$342.512.9%
Consumer & retail$300.126%
Other/diversified$268.120.7%
Financial services$229.112.8%
Materials$206.129.6%
Entertainment & media$204.120.7%

The pandemic enabled those well equipped to pivot towards the new environment and business landscape, while those without these advancements were forced to haphazardly adjust.

As a result, billionaires in these two industries have reaped great rewards. Between April-July 2020 they generated $164.8 billion and $145.7 billion in wealth between technology and healthcare respectively.

Playing Catchup

The graphic shows the two leading industries building a considerable spread between them and those lagging behind. As these innovative technologies take the mainstream, it may suggest the other industries will have the chance to catch up.

In real estate for instance, the wave of innovation is least prevalent according to the original report, yet disruption and innovation are already on their way. Consider two stocks in Zillow and Redfin: the first operates in residential real estate services exclusively through web and mobile, while the latter is a digital real estate brokerage that has the potential to undercut real estate agents.

Could these industry wealth results in a post-pandemic world look very different?

Where does this data come from?

Source: PWC Billionaires Report.
Notes: This data was released in the summer of 2020

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Datastream

Bitcoin is the Fastest Asset to Reach a $1 Trillion Market Cap

Bitcoin is now part of a select very few assets that hold a market cap greater than $1 trillion. How long did it take to get there?

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Bitcoin fastest asset to $1 trillion

The Briefing

  • Bitcoin (BTC) hit a $1 trillion market cap in just 12 years, making it the fastest asset to do so
  • Investor sentiment towards BTC appears to be at extreme bullishness, with the asset adding roughly $500 billion in market cap just in 2021

Bitcoin is the Fastest Asset to Reach $1 Trillion

The world is moving forward at an accelerated pace. Historically, it’s taken multiple decades for companies to be worth $1 trillion. For bitcoin, it took just 12 short years to reach such a milestone.

To help put things into perspective, here’s a look at how long it took America’s biggest tech companies to reach the $1 trillion market cap.

AssetTime To Reach $1 TrillionCurrent Market Cap
Microsoft44 years$1.9 trillion
Apple42 years$2.2 trillion
Amazon24 years$1.7 trillion
Google21 years$1.5 trillion
Bitcoin12 years$1.1 trillion

Market caps as of April 12, 2021

Extreme Bullish Sentiment

Bitcoin has been subject to widespread commotion in markets.

At the start of 2021, the cryptocurrency had a more modest market cap of $500 billion, but has gained more than another $500 billion since. An onslaught of headlines has contributed to extremely bullish investor sentiment, including:

1. CEOs begin to show interest
Elon Musk and Jack Dorsey have made sizable investments in bitcoin through Tesla and Square, respectively. It’s estimated the gain from Tesla’s $1.5 billion bitcoin investment was greater than the profits from the entirety of their business in 2020.

2. New ETFs on the block
Multiple Bitcoin ETFs focused were recently approved by Canadian regulators and some have already launched on the Toronto Stock Exchange (TSX). For many years, the Grayscale Bitcoin Trust (GBTC) was the only readily accessible investment vehicle trading on equity markets that had exposure to BTC.

3. Financial institutions finally joining in?
Mastercard, Visa, and Bank of New York Mellon have made announcements to make it easier for customers to use cryptocurrencies.

On to the Next Trillion?

Future projections for the price of bitcoin are garnering more extreme and widening price targets.

The accelerated rate of change today has many of the Big Tech companies already inching closer to the next trillion in value. Will bitcoin follow suit?

Where does this data come from?

Source: coinmarketcap.com
Notes: Financial data is as of April 12, 2021

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Datastream

What The Data Says About Wealth Inequality

Over the past decade, the top 1% of U.S. households’ portion of wealth has gone from 28.6% to 31.2%.

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The Briefing

  • Today, the top 1% of U.S. households own 31.2% of total wealth
  • Data going back over 200 years suggests that wealth inequality in both the U.S. and Europe reached its peak in the early 1900s

What The Data Says About Wealth Inequality

Wealth inequality has gone through peaks and troughs throughout history.

Most recently, in the decade between 2010 and 2020, the top 1% of U.S. households’ portion of wealth has gone from 28.6% to 31.2%.

However, when expressed in raw dollars, things begin to look different. Wealth during the same period for the 1% went from approximately $17.5 trillion to $35 trillion. Meanwhile, the total wealth pool rose from $60 trillion to $112 trillion.

In other words, all households by category have amassed wealth during the same period, albeit at different rates.

Household Wealth PercentileAnnual Growth in Wealth (CAGR)
Top 1%6.54%
90-99%5.75%
50-90%4.97%
Bottom 50%3.30%

Source: The Federal Reserve

Drivers Of Wealth Inequality

The longest bull market in history, which went from March 2009 to February 2020, has been a big driver for the recent divergence. The U.S. composition of wealth for the top 1% of households skews towards corporate equities and mutual funds, of which they collectively own $14 trillion. By contrast, the bottom 50% of households own $0.16 trillion.

It’s often said a stock market correction is long overdue. Since the top 1% of households clearly have the most skin in the game, if one were to transpire, wealth inequality would likely retract.

A Longer Term Look

Although the inequality of wealth is heavily discussed in today’s climate, the numbers have been higher before.

Wealth inequality, measured by the top 1% of U.S. households’ portion of wealth, was at its peak at the start of the 20th century. Back then, a harsh and more concrete class divide with lower rates of upward mobility were common themes.

2 centuries of wealth inequality

At its peak in 1910, the top 1% of U.S. households owned well over 40% of all wealth. Major world wars and the Great Depression seemed to be catalysts against this, and the years after WWII brought about some of the lowest levels of inequality seen in the modern era.

Wealth inequality has ebbed and flowed throughout history, but it has steadily crept back up in the last few decades. Today, its adverse effects continue to garner the attention of more people—including policy makers who are facing immense pressure to find a solution.

Where does this data come from?

Source: The Fed
Notes: This data covers Q2’2010-Q2’2020

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