Example: Megan Robinson/Axios
The bear market in cryptocurrencies has not completely scared off some black investors who have embraced the sector as a way to make a fortune.
Why is it important? Overnight, the battered bitcoin rallied to more than $20,000 after weeks of languishing around $16,000. But the crypto winter has wiped billions off the market capitalization of digital currencies; Meanwhile, the emerging FTX scandal has contributed to the lack of trust in financial institutions, and crypto itself.
- Surprisingly, some hardcore enthusiasts are in no hurry to abandon crypto and plan to invest in the beaten sector.
MinimizeIn the year In 2020 and 2021, the dynamic asset class became a big topic among black social media users. They saw digital currencies as a way to break down the economic divide, create wealth and democratize the world’s financial system.
- According to a Kansas City Federal Reserve report published in 2022, the wealth gap between some black investors and other races could be closed by investing in cryptocurrency.
- According to a 2021 study by NORC at the University of Chicago, 13% of Americans reported buying or trading crypto, of which 44% were non-white.
Game Mode: To be sure, retail crypto buyers don’t ignore loading risks (it’s hard to). However, black investors are slightly more bullish on crypto than their white counterparts, according to a study by Ariel Investments and Charles Schwab in April 2022, when the crypto rout accelerated.
- It showed that 25% of blacks have invested in digital coins, compared to 15% of whites.
- According to the survey, black traders are “over twice as likely to view cryptocurrency as the best investment choice” (8% compared to 4% of whites).
What they say: Deirdre McIntyre, founder of Black People & Cryptocurrency, a discussion group based on Bitcoin technology, said in a statement to Axios that crypto crime and business bankruptcy is dominating public opinion. That may be hindering their ability to see the long-term potential of crypto.
- “What is happening in crypto already exists in the financial and corporate sectors. [should not be ] It suggests how all crypto business is or should be done,” she said. “We are moving towards more fair, global, trustless, peer-to-peer global transactions based on crypto knowledge.”
Investors like Ivan Eberhart They are still spoilers. The Atlanta resident bought Bitcoin in 2017, then invested in Binance coin and Chainlink. Eberhart will continue in space because he sees it as a bright future.
Cryptocurrencies like Bitcoin And Ethereum is a long-term store of value, Eduardo Jackson, founder and CEO of Cinema Draft LLC, told Axios.
- A cryptocurrency consultant who created blacks in Bitcoin tells Axios he knows someone affected by the FTX collapse. However, Jackson admits to educating investors on cryptocurrency to fully understand it;
Yes, but: FTX’s spectacular fall has burned many investors, with many shoes still to be left. He put celebrities under the microscope for their role in promoting cryptocurrency to small investors.
- Algernon Austin, director of racial and economic justice at the Center for Economic and Policy Research, told Axios that the focus is more on the (higher) risks to black investors.
- “I guess the high level of black investment in crypto is that it’s very serious crypto trading, often by black celebrities. The difference we see with crypto and with traditional investment…
The main point is: With distrust in crypto rising among investors of all races, black crypto buyers are just like everyone else: they’re struggling to figure out their next move. And while demand is high, it’s unclear whether it will continue.