Black Americans Hit Hard By Crypto Collapse

Digital currencies have fallen dramatically, and bitcoin alone has lost more than 50% of its value this year.

With consistent reports of falling value, the question arises: who is really hit?

A study by Ariel Investments found that, on average, black Americans own significantly more cryptocurrency than their white counterparts. About a quarter (25%) of black Americans own crypto, and when investors under the age of 40 are examined, that number jumps to 38%. According to the data, 15% of white investors own cryptography and 29% are under 40 years old. Black investors were more than twice as likely (11%) to name crypto as their first investment compared to white investors (4%).

Terri Bradford, a research specialist with the Federal Reserve Bank of Kansas City, told NPR’s Planet Money that the disparity is due in part to a long-standing mistrust in financial systems.

“It has an impact generationally. And that mistrust is there. Some people believe that the financial system just doesn’t work,” Bradford said in the podcast.

Host Adrian Ma highlighted how the crypto, a new currency out of all controlled systems, and its attractiveness of gaining financial independence with a low entry barrier and further enhanced with celebrity endorsements.

Related: Are Crypto and NFT a passing fad?

“Retail investors, especially in the black and brown communities, have been sold a lot, but there’s no interest. And we’re the first group to lose,” said Samson Williams, a former cryptocurrency investor. Planet Money.

Williams told the host that he was initially excited about cryptography because of the idea that digital currency could be an engine for racial equity. Now, he has begun to lose faith.

“The day someone says, that’s how bitcoin or crypto solved unemployment and a decent salary, then I’ll take them seriously,” Williams said in the podcast.

According to NPR, a recent estimate of the per capita wealth of black and white Americans found that the wealth gap was 6 to 1.

Related: 4 main reasons why the cryptocurrency market crashes

Jefferson Noel, 27, told the Financial Times that after a $ 5 bitcoin purchase was worth $ 70 in 2019, he invested thousands more in other digital currencies. But the recent fall has wiped out more than 20% of its investment.

“As far as I can tell, the black community sees cryptography as a way to level the playing field and get into the game before goalkeepers prevent others from participating,” Noel told the post.

Meanwhile, while researching investment alternatives, he is still buying crypto, he told FT.

Related: The crash of Bitcoin cryptography prompted this company to stop withdrawals. Here’s why

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