Back in the 1920s, Charles Mitchell — the swaggering head of National City Bank, the forerunner to Citigroup — had a ritual. He would take his bond salesmen to lunch at the Bankers Club, perched atop the Equitable Building at 120 Broadway, and point to the city below, stretched out in miniature. “There are six million people with incomes that aggregate thousands of millions of dollars,” he’d say. “They are just waiting for someone to come to tell them what to do with their savings. Take a good look, eat a good lunch and then go down and tell them.”

For Mitchell, finance and the new instruments of wealth — stocks, margin loans, investment trusts and even exotic foreign bonds — were not to be hidden away but promoted like any other product. “It has always seemed to me that there is, and always has been, too much mystery connected with banking,” he liked to say.

He wasn’t alone in preaching the gospel of access. John Raskob — a top executive at General Motors, a born promoter and the man who built the Empire State Building — famously declared, “Everybody ought to be rich!” He explained: “I didn’t see why the working men and women of our country should not be let in on the tremendous profits being made in America today.” Raskob set out to create one of the first mutual funds, explicitly designed to give “the little fellows” a chance to join the boom.

Nearly a century later, we are in the grip of a sweeping new age of financialization and innovation — the boldest transformation in money and investing since the 1920s — that is also driven by the idea of expanding access to markets. Private equity, venture capital and private credit, once the preserve of institutions and wealthy individuals, are now about to be repackaged for the masses, even woven into 401(k) retirement plans. Crypto tokens are being sold as a way to buy slices of private firms like SpaceX and OpenAI, in the gray zone of securities law.

It all comes amid a new stock boom, fueled by a mania for A.I., and with a new administration in Washington that is determined to loosen rules — creating a permissive spirit similar to the one that passed for innovation in the 1920s. The Trump administration is working on rolling back key provisions of the Dodd-Frank Act, easing capital requirements for midsize banks and sidelining the Consumer Financial Protection Bureau — an agency born after 2008 to police predatory lending. Congress, for its part, has advanced measures like the Genius Act and, more recently, the so-called Financial Innovation and Technology for the 21st Century Act — billed as modernization and, in practice, opening the gates for crypto and other speculative products.

And just as in Mitchell’s day, they have their boosters. “Only the biggest companies can go public, which limits opportunities for the little guy,” Vlad Tenev of Robinhood has said, insisting that “the next frontier is making sure these opportunities are open to retail investors.” Marc Rowan of Apollo is equally blunt about retirement savings, arguing that asset managers have “leveraged the future of retirement to four stocks,” which will prove to be “an irresponsible thing for us to have done.”

What has shifted are the buzzwords and the gloss; what has not is the promise — that the American dream itself could be remade into a get-rich fantasy, a promise first popularized in the 1920s. Mitchell’s belief that stocks and bonds were for everyone and should be sold “over the counter, just the same way a clerk sells a necktie,” helped elevate him alongside Babe Ruth and Charles Lindbergh as a symbol of American ambition. Financiers became celebrities and graced the covers of Forbes (started in 1917) and Time (started in 1923) for the first time. Those magazines may have declined in recent decades, but today this same message — of the thrill of a democratized financial sector where anyone can become rich — is fed to us in infinite scrolls on social media of aspiration and envy.

For decades, most Americans have missed out on the stock market’s riches: Nearly 40 percent of Americans don’t own any stock at all, and more than 90 percent of all equities are controlled by the wealthiest 10 percent of families. Access has long been fenced off by rules around “accredited investors,” a legal category created in the 1930s to protect households from risky, opaque offerings. The qualifications are strict: You need $1 million in net worth (excluding your home) or an income of at least $200,000 a year ($300,000 for a couple). The idea is that only the wealthy can afford to lose money in speculative deals. In practice, the definition gives the richest households — about 18 percent of American families — privileged entry into private markets. They can buy into companies like Facebook or Uber years before the public ever has the chance, capturing the overwhelming share of the gains. By the time the average investor can purchase shares on a stock exchange, much of the upside has already been taken.

Now that barrier is being steadily lowered. What was once a bright line meant to keep average investors out is being blurred in the name of access. It is not hard to see the appeal of breaking open those gates and allowing ordinary savers a shot at the kinds of returns that built fortunes for institutions and elites.

Yet history offers a blunt reminder: When transformation comes this quickly, it rarely benefits everyone unless it is paired with transparency, oversight and regulation. The dot-com boom of the late 1990s was pitched as a democratizing moment, too, until it collapsed under a wave of hype and fraud. The pattern is familiar, stretching back to 1929: Whenever access expands faster than safeguards, charlatans rush in and ordinary investors are often left holding the bag.

The greatest speculative asset class of the past decade has been cryptocurrency, a realm where risk itself is part of the appeal. For years it was dismissed by some of the most venerated investors, like Warren Buffett, as a plaything for gamblers and thrill-seekers. But under a crypto-friendly Trump administration, a new group of financiers is working to reimagine it as something every American should own — not just through exchanges and wallets but through investment vehicles built to slip into retirement accounts and mutual funds.

No one has embraced this idea more passionately than Michael Saylor of the business-software company Strategy (formerly known as MicroStrategy). With his silver beard, clipped diction and unblinking certainty, Saylor carries himself less like a corporate manager and more like a prophet who believes he has glimpsed the future before anyone else.

For most of its life, Strategy sold analytics tools to corporations. But Saylor has completely recast it. Over the past few years, he borrowed more than $2 billion through debt offerings and convertible notes to buy over 200,000 Bitcoins — worth more than $13 billion at recent prices. Today, Strategy’s stock no longer trades on software sales; it rises and falls almost entirely with the price of Bitcoin. For investors, the appeal is obvious: It is an easy way to buy into Bitcoin’s upside, wrapped in the familiar clothing of a public stock.

Saylor himself has become more than a chief executive; he is Bitcoin’s evangelist in chief. On podcasts, TV hits and conference stages, he preaches the virtues of “digital gold” with a fervor that blends salesman and prophet. To his followers, he is a folk hero who showed Wall Street how to bet big on the future. And so far, he has been right: As Bitcoin recovered from its 2022 crash, Strategy’s shares have soared — rising even faster than the coin itself. Nearly half the company’s stock is now held by retail investors. It is such a popular stock that it was added to the Nasdaq 100 index in late 2024, further attracting almost $4 million a day from individual traders, cementing its status as a cult favorite on Main Street as much as on Wall Street.

Wall Street, for its part, has been pursuing similar strategies. Some Bitcoin exchange-traded funds (E.T.F.s) now borrow against their holdings and use that leverage to promise two or three times the coin’s daily moves, turning an already volatile asset into something closer to a slot machine. Grayscale’s Bitcoin Trust ballooned into one of the largest crypto funds by offering brokerage-friendly access. Firms like Celsius and BlockFi went one step further: They lured customers with “safe” double-digit returns by lending deposits, borrowing against them and reinvesting the proceeds. For a while it looked like alchemy. Then the tide went out, the leverage was exposed and billions of dollars disappeared in bankruptcy.

And it is no longer just the fringe. BlackRock, the world’s largest money manager, has launched a Bitcoin E.T.F., giving everyday investors direct exposure to the coin. ProShares sells E.T.F.s that use borrowing and derivatives to deliver two times Bitcoin’s daily gains — or losses. Even mainstream firms like Fidelity and Invesco have introduced crypto-linked funds, wrapping digital speculation in the familiar package of a mutual fund or exchange-traded product.

The logic of the most leveraged crypto vehicles is strikingly similar to the investment trusts of 1929. Back then, firms like Goldman Sachs created a complex structure that made speculation look safe and simple. The Goldman Sachs Investment Trust was a case study in financial alchemy. Marketed under the halo of one of Wall Street’s most prestigious names, it promised ordinary investors the safety of professional management and the upside of modern finance. In reality, it was a hall of mirrors: The trust invested in other trusts, including ones Goldman itself had floated, layering leverage upon leverage — a Russian doll of debt — until no one could be sure what lay inside. At its peak, the shares traded above $300; by 1932, they were worth less than $2.

So what may seem like a normal stock or fund to the average investor may actually be one bet stacked inside another. As long as money keeps flowing in and prices climb, the system holds. But if sentiment shifts, the layers collapse.

Perhaps no one has embraced the creed of access more than Vlad Tenev, the chief executive of Robinhood — the trading platform whose very name was chosen to signal that finance should belong to the masses. After turning stock trading into something people could do on their smartphones, Tenev now wants to push further: building products that allow everyday investors to buy into private companies.

Over the summer, Tenev announced that Robinhood would begin experimenting with “private company tokens” — digital instruments tied to stakes in SpaceX and OpenAI. These tokens can be bought and sold on Robinhood’s app in Europe, giving retail investors exposure to high-profile start-ups without waiting for an initial public offering. Tenev described it as a way to “level the playing field” and give individuals the same early access that venture capitalists and sovereign wealth funds enjoy.

When he announced it, it felt revolutionary — until OpenAI clapped back: “These ‘OpenAI tokens’ are not OpenAI equity. We did not partner with Robinhood, were not involved in this and do not endorse it. Any transfer of OpenAI equity requires our approval — we did not approve any transfer.”

Tenev responded that the tokens were not technically OpenAI equity but rather a way to give retail investors indirect exposure through Robinhood’s stake in a fund.

At the same time, Robinhood recently filed paperwork in the United States to create a new financial instrument that would package shares of private companies into a fund so that everyday savers could buy them, much as they would a mutual fund. As Tenev put it, the goal is to offer investors “opportunities once reserved for the elite.”

If Tenev has his way, more and more companies may soon be “investable” without ever becoming public — sidestepping the disclosure, auditing and quarterly reporting that such companies face.

That is the big difference between public and private markets. A company that lists on the New York Stock Exchange or Nasdaq must file audited financial statements with the Securities and Exchange Commission every quarter, detailing revenue, profits, debt and risks in exhaustive form. Each year it files a 10-K form that can run hundreds of pages. Executives are required to answer questions from analysts on earnings calls, and their disclosures are scrutinized by journalists, investors and short-sellers alike. By contrast, private companies have no such obligations. They can release what they choose, when they choose. Buying Microsoft on a public exchange provides access to reams of independently audited data every 90 days. Buying OpenAI through a private fund may give you little more than a glossy investor deck. Access without disclosure, in other words, is not the same as transparency.

Which brings us to the biggest risk of bringing private-market assets to the public: With no obligation to publish audited financials or reconcile their valuations in an actual marketplace, private-fund managers have a lot of latitude to assign whatever value they want to their holdings.

When you hear that a nonpublic company is worth $10 billion, that’s only because a small number of venture capitalists or private-equity executives have decided that is what it is worth. Losses can be smoothed, downturns delayed and volatility papered over. Some in the industry argue that’s a feature, not a bug, of investing in illiquid assets. But others have coined their own term for it: “mark-to-make-believe.”

Private firms have been marking their assets up and down in self-serving ways for years. When the Nasdaq plunged more than 30 percent in 2022, many private-equity portfolios were written down only modestly, with start-up valuations for the likes of Stripe and Klarna cut only months later, and only after the gap became impossible to ignore.

For individual investors, it means they may never really know what their holdings are worth until the day they try to sell them. And for the system as a whole, it means trillions of dollars could be sitting on balance sheets at values that are, depending on the day, aspirational.

Even so, after years of lobbying, private investments may soon be part of your 401(k) plan.

For decades, giants like Blackstone, KKR, Apollo, Carlyle and Brookfield raised their money from sources like pension funds, endowments and sovereign wealth funds — institutions with enormous pools of capital and the patience to lock it up for 10 years or more. In the past few years, more than $11 trillion has poured into private markets. But almost none of that has come from ordinary households. The only individuals with access were the wealthiest — those who were considered “accredited investors.”

Traditional private equity was a locked box to the public. A firm might raise a $10 billion fund, then use that capital — plus borrowed money — to buy some assets: a portfolio of companies, say, or an office complex or a chain of nursing homes. Investors committed their money up front, waited a decade while the firm tried to improve and eventually sell the holdings and only then got their money back. The returns could be spectacular — and the top funds outperformed the stock market. But the price was what the finance world calls illiquidity — a euphemism for surrendering control of your money, often for at least a decade, with no way out once you signed the papers.

Now the industry is trying to go after a much larger market: retail investors and retirement savings. The prize is enormous. Americans hold more than $45 trillion in retirement savings. About $9 trillion sits in 401(k)s, the pool that private equity and venture firms have their eye on. Even capturing a sliver of that market — say 5 percent — would represent hundreds of billions of dollars in new capital under management and billions in steady fees, regardless of performance.

To accomplish this feat, these players are now creating new vehicles that look a lot like mutual funds that are liquid, even when the assets themselves are not. The products have different names, but the pitch is the same: They let everyday investors put money into things like private equity or real estate, while promising at least some ability to sell. The catch is that withdrawals are limited. Investors can usually ask for their money back, but only a small portion of the fund, generally 5 percent, can be redeemed in any one quarter — so if too many investors rush for the exits at the same time, you will likely have to wait your turn to sell. Unlike a mutual fund or an E.T.F., you can’t press “sell” and always get your cash in a day or two. Your money is stuck until the managers decide they can sell assets to meet redemptions.

Blackstone’s flagship real-estate fund, BREIT, has grown past $60 billion. Its private-credit fund, BCRED, is nearly $50 billion. Together with rivals like KKR, Apollo and Starwood, these “semiliquid” funds have raised hundreds of billions in capital in less than a decade — faster than almost any other corner of finance.

The growth has been breathtaking — but so, too, is the fragility built into the model. That mismatch has already been tested. In late 2022, Blackstone’s BREIT slammed into its redemption limits when too many investors tried to pull money out at once. Requests exceeded the 5 percent quarterly cap. Blackstone rationed withdrawals, forcing some investors to wait months to see their cash. Starwood’s competing real estate fund did the same, with nearly a billion dollars of redemption requests stuck in line.

The managers stressed that their portfolios were solid — and the mechanism worked. But for investors, the experience felt like a trap. Putting money in was effortless. When they could get it back out was suddenly uncertain.

Now imagine that same dynamic spreading into retirement accounts. Regulators have begun opening the door for 401(k) savers to put money into semiliquid private-equity and credit funds. To workers who think they’re buying stakes in high-flying start-ups and private companies, the fine print may come as a shock: You may not be able to get your money back when you need it most. For the private-equity industry, however, it promises a windfall. Firms like Blackstone and KKR stand to collect enormous fees on every dollar that flows in, regardless of whether the investments ultimately pay off. They lobbied aggressively in Washington to win this access, and they got it. Now the question is: Will it work? It will be a live and extremely high-stakes test of whether the most complex corners of finance can safely be opened to millions of ordinary savers.

Every great panic in modern finance has started the same way: too much borrowed money. In 1929, it was margin loans — everyone got swept up in buying equities with borrowed money, and they couldn’t fathom a downturn. In 2008, it was subprime mortgages. Millions of families around the country were underwater on their mortgage payments, and their homes were worth less than what they paid to buy them.

In both instances, the banks didn’t have enough money. In the 1930s, some 9,000 banks failed. After the 2008 crisis, the U.S. government saved some of the biggest banks from tipping over, merged others and let roughly 300 fail.

So where is the leverage now? It has moved from the banks to a new market called private credit — direct loans to companies, not made by traditional banks but by firms like Apollo and KKR that have created new funds that they then loan out. What was once a boutique strategy for specialists is now a $2 trillion industry, roughly five times as large as it was in 2009 — with insurance companies, sovereign wealth funds and pension plans pouring in. Some firms, like Apollo, have created their own insurance companies so they can take the premiums and invest them in their own private-credit funds.

The promise is simple: higher yields than the public bond market, with seemingly lower volatility because loans are held at “smooth” valuations — meaning that, just like in private equity, the fund managers have a strong hand in determining what the valuation is at any given moment.

While private credit has grown up largely outside the regulatory perimeter, regulators are taking notice. A study published by the Federal Reserve Bank of Boston recently warned that banks “retain indirect exposure to the credit risk of private-credit loans, even though they do not directly originate or hold those loans.” In other words, even if the loans sit on the books of an insurer or a private fund, the banking system is still on the hook — through lending facilities, liquidity backstops and structured products. And, as the Fed study put it, the growth of this market is “a double-edged sword”: It can provide credit in lean times, but it can also enable overleveraging by risky borrowers when money feels cheap and plentiful.

And then there is this new wrinkle: Just as private equity and venture capital plan to tap retail investors’ retirement accounts, so does the private-credit industry — again wrapping private credit into semiliquid vehicles that promise liquidity. The most prominent experiment so far is called PRIV, a State Street E.T.F. seeded with loans provided in part by Apollo. And more are coming.

In an interview, Lloyd Blankfein, the former chief executive of Goldman Sachs, told me: “In thinking about another crisis, the focus is appropriately on risky assets and hidden leverage. But we need to pay more attention to the new channels that have and are being opened up by alternative managers for their hard-to-price, less liquid assets.” He said the firms that have lobbied Washington to be allowed to do all this may ultimately come to regret it. “They are underestimating the amplification of their risks,” he said, “if they impose losses on Main Street as opposed to institutions and other sophisticated investors.”

The truth is that markets are astonishingly resilient. Over time, anyone who simply bet on progress has almost always been rewarded. That has been the story since long before 1929. This perennially upward climb has made it easy to dismiss skeptics — like the economist Roger Babson, who in the fall of 1929 famously declared: “Sooner or later a crash is coming which will take in the leading stocks” — as Cassandras who simply don’t understand the power of the latest financial innovations. (In Babson’s case, the market dipped briefly after his warning, then rose again before the crash.) That is what makes speculation so intoxicating and so perilous at once. But what’s different today is that the newest frontier of finance is designed to skirt the very guardrails that were created in the aftermath of the crash and helped keep calamity at bay for nearly a century.

Those inclined to believe that this is a good thing might take a lesson from Groucho Marx. In the run-up to the crash, even the famous comedian was buying stock on margin and regularly spending hours at his local brokerage, the Newman Brothers & Worms branch in Great Neck, N.Y., reading the ticker tape.

When he questioned the branch manager about the strength of some stocks, he was told: “Look, Mr. Marx, this thing is bigger than both of us. Don’t fight it. Just be assured that you’re going to wind up a very wealthy man.”

After the crash, Marx ended up having to mortgage his home to pay back the margin loans. He tracked down the manager and berated him.

“Aren’t you the fellow who said nothing could go wrong — that we were in a world market?” Groucho asked.

“I guess I made a mistake,” the embarrassed branch manager replied.

“No, I’m the one who made a mistake,” Marx retorted. “I listened to you.”

Source photograph for illustration above: Thomas Barwick/Getty Images