Many Black Americans have turned to bitcoin to find a new kind of financial success.
This is an opinion editorial by Nicholas Otieno, a freelance writer focused on fintech and crypto.
Bitcoin has received growing attention from investors, the media and regulatory authorities as its price rises and adoption develops worldwide. However, relatively little is known about the black investors who have been attracted to it. Whether you are purchasing bitcoin or not, you can learn important lessons from these black Americans and become a more intelligent investor in any field.
In the late 2010s, a significant number of black Americans began researching Bitcoin with enthusiasm. They saw the promise of its blockchain technology, a distributed ledger that provides an immutable record of transactions. They watched the price movement of bitcoin hitting record highs, which doubtlessly appealed to them as well.
Many bitcoin investors started investing in cryptocurrency during that period — a time that later coincided with the distribution of COVID-19 stimulus checks in 2020. Millions of people who had never had much to invest or save suddenly had cash on hand, and many chose to put them into bitcoin.
The Crypto Bubble
Following this period, in which many black investors found bitcoin, the overall crypto market has started to shrink.
Black investors were among the thousands of Americans who witnessed their cryptocurrency holdings disappear after these digital currencies entered into a winter market.
So far, cryptocurrencies have lost more than $2 trillion in value over the last year, which has seen bitcoin plunge from highs of $69,000 reached in November 2021 to the current price of about $20,000 per coin.
The crypto crash hit black Americans as hard or harder than any other demographic community, in part because bitcoin had become so popular in that community. According to data collected by Harris Poll, 23% of black Americans own digital assets, while 11% of white Americans own such assets.
The crypto market fall has been costly and tragic, but that has not deterred many within the Black community, as they have such a strong desire to discover financial autonomy.
Addressing Financial Inclusion
Bitcoin naturally holds practical appeal for small-dollar investors from historically marginalized communities who distrust traditional finance. For instance, Black Americans can purchase BTC on digital platforms without a credit check, a step that may hold them back from financial inclusion in other assets.
Many Black investors have invested funds into bitcoin because they found it hard to build generational wealth in the traditional system. Overlooked by investment managers and discriminated against by banks, many Black investors have turned to more sovereign opportunities.
This long history of discrimination around investments explains why the world now witnesses a wide demography of interest and inclusivity in Bitcoin — because it is new, open and has fewer barriers to entry.
Another reason why people of color are adopting Bitcoin at a higher rate than others is likely because the cryptocurrency offers a cheaper remittance method than sending funds through banks.
Surviving In A Bear Market
It is true to say that the cryptocurrency market can be a risky place due to its volatility. Profits are made and lost within minutes. But despite this, many black investors have remained bullish on Bitcoin.
A good example of a successful black cryptocurrency investor can be found in Jefferson Noel, a 27-year-old. Noel gained his first exposure to cryptocurrency in January 2019 when he accidentally invested $5 in bitcoin while using a payment platform called Cash App. By May 2020, the value of his unintentional investment rose to $70. This inspired him and, as a result, he put another $20,000 of his savings into cryptocurrency. Recently, Jefferson said he is buying more altcoins despite persistent losses that have seen more than 20% of his cryptocurrency investment wiped out this year. Clearly, Bitcoin opened his eyes about becoming a more active investor.
Another can be found in Charlene Fadirepo, a banker who used to work at the Federal Reserve’s inspector general’s office, who has become a convicted bitcoin holder.
“Last year, she and her husband bought $6,000 worth (of bitcoin),” Time reported. “No investment has ever generated the kinds of returns for them that Bitcoin has.”
In A Nutshell
A lot can be learned from Black investors as they demonstrate that having the right mindset and resilience to deal with setbacks is the key to successful Bitcoin investing. Those who want to make money through bitcoin investing should be willing to hold on to their investments through the ups and downs and consider the fact that it can grant a form of financial security that is often barred from the underbanked. For many, this can be much more valuable than any quick gains.
This is a guest post by Nicholas Otieno. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.