*Some Black investors turn to cryptocurrency as a way to help to close the wealth gap but crypto has been in decline over the past year.
According to Business Insider, “As of September 2021, 18% of Black Americans overall had invested in, traded, or used a cryptocurrency, compared to 13% of white Americans, according to a Pew Research poll of over 10,000 US adults,” the outlet writes.
The Kansas City Federal Reserve noted in a June report that white Americans were most likely to own stocks and mutual funds than cryptocurrency but the opposite is true for Black Americans.
“We saw the same thing happen with the internet bubble, when we saw many African American first-time investors chasing hot internet stocks,” Ariel Investments founder John W. Rogers told The Atlantic. “So many people made so much money over the last seven or eight years, and it is natural to fall into the trap of chasing what worked yesterday.”
READ MORE: Why Tom Brady, David Ortiz, Jimmy Fallon and Other Celebrities Are Getting Sued Over Crypto
Here’s more from Business Insider:
Given many Black Americans’ exposure to crypto, as well as the fact many hopped aboard late — investing at higher prices than their peers — these investors have been particularly impacted by crypto’s decline over the past year. Following the downfall of Sam Bankman-Fried and FTX in November, cryptocurrency trading volumes plummeted 50%. Since last year, crypto’s market cap has lost nearly three-fourths of its value, with bitcoin and ethereum, both down nearly 75% from their record-highs in November of 2021.
Black investors turn to cryptocurrency for a myriad of reasons. Many distrust banks and others are lured by way of endorsements from celebrities.
“If traditional finance has worked for you, you see crypto as risky,” former Obama administration appointee Cleve Mesidor previously told Insider. “You see it as speculative. For those of us who have been locked out, traditional finance is risky.”
In related news, we reported previously, via CNN, that Tom Brady, Madonna, Gwyneth Paltrow and baseball Hall-of-Famer David Ortiz are just some of the big names facing lawsuits from investors as the crypto world crumbles in the wake of FTX’s fall from grace. The backlash started earlier this month, when a class-action suit was filed against celebrities, including Jimmy Fallon, Justin Bieber and Serena Williams for promoting Bored Ape Yacht Club NFTs.
NFTs are a crypto-related phenomenon that went mainstream, essentially transforming digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain. The Bored Ape Yacht Club is a collection of 10,000 pieces of digital NFT art living on the ethereum (eth) blockchain.
Tom Brady, Gisele Bundchen and others were sued in November by an FTX investor for their endorsement of the now-disgraced crypto platform, and then Brady and Ortiz were named again in early December in a similar lawsuit for their backing of FTX.
The lawsuits allege that these public figures did not properly disclose their own involvement with digital financial institutions.
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