I have been reading that In the beginning of the Crypto revolution, most Black Americans were much less likely to own cryptocurrencies than white Americans. That has changed with Cryptos growth in popularity in recent years. A report from the Federal Reserve Bank of Atlanta gave several potential reasons why.
It is believed that Black investors may see crypto as a way to close the racial wealth gap. According to the report, the median Black households’ wealth was roughly $24,000 in 2019, compared to over $188,000 for the median white household. The report pointed to a survey in which 27% of Black investors said they expect a 20% or higher annual return from cryptocurrencies: only 12% of white investors said the same.
It is further believed that some investors may trust cryptocurrency more than traditional financial institutions. An April 2022, Ariel and Charles Schwab survey found 28% of Black Americans distrust banks, compared to 18% of white Americans. Also, only 5.6% of Financial Advisors identify as Black, so access to advice is also limited.
“If traditional finance has worked for you, you see crypto as risky,” according to former Obama administration appointee Cleve Mesidor who previously told Business Insider. “You see it as speculative. For those of us who have been locked out, traditional finance is risky.”
Some may be drawn to crypto’s accessibility for investors without a bank account or substantial credit history. The endorsements of various athletes, celebrities, and politicians have likely had some influence as well.
The Kansas City Fed’s report referenced a Harris Poll that found that 58% of survey participants who had heard of cryptocurrency thought the industry’s advertisements were effective at encouraging people to invest in crypto.