In 2013, as crypto was creeping into the mainstream, Cleve Mesidor was working as an appointee in the Obama administration’s Department of Commerce. As a favor to a friend, Mesidor helped pen a press release about bitcoin. Though fairly uninterested and unimpressed at the time, in just a few years Mesidor would find herself steeped in the world of crypto, quitting her job to become a full time representative of the industry and a committed investor.
The awakening to the world of crypto came a few years after Mesidor helped with her friend’s press release, when she watched “Dope”, a movie about a group of Black teenagers who use bitcoin to thwart a financial criminal. The film, she said, sparked a vision in her mind of crypto as a path to racial equity, a tool for people who had been either accidentally or deliberately left out of the traditional financial system.
That kind of awakening is a common experience for minority investors who say they’re bullish on crypto — and who continue to hold even as the market suffers through a steep sell-off this year.
The losses, they say, are inconsequential to the overall objective of the project, with tokens like bitcoin and ethereum providing a sense of freedom, and the potential to level the playing field with those who have never experienced discrimination from lenders or bankers.
Jacob Faber, an NYU professor and an expert in social inequality, told Insider that the perspective of people like Mesidor was likely a result of a long history of discrimination in the financial system, with well documented evidence of bias in everything from opening bank accounts to getting a mortgage to getting a loan to start a business.
A survey by Ariel Investments and Charles Schwab released in April showed 28% of Black Americans say they distrust banks, compared to just 18% of White Americans. 56% also reported not feeling respected by financial institutions — something Mesidor can relate to. She recalled experiences of her and her family having loan applications denied or being treated poorly by bank employees.
“I wasn’t even taken seriously. You know, when somebody is just like, ‘why are you wasting my time?'” Mesidor said. “Get a degree. We did that. Get a good paying job with benefits, did that. And still it’s not enough.”
The result over time has been that many Black and minority investors are either locked out or shy away from traditional investment opportunities that may be offered to white investors, and possibly lured by decentralized (and often riskier) investments.
Only 34% of Black Americans own stocks compared to 61% of white Americans, according to the Federal Reserve Board, but that ratio is flipped when it comes to cryptocurrency. Among Black investors, 25% own crypto compared to just 15% of white investors, Ariel and Charles Schwab reported.
That also means that Black investors may have more significant exposure to 2022’s crypto crash, which has slashed the total market value by about $2 trillion since last November and sent bitcoin tumbling from $69,000 to just over $20,000.
But Mesidor feels the trend towards digital assets is only natural for Black investors.
“If traditional finance has worked for you, you see crypto as risky. You see it as speculative. For those of us who have been locked out, traditional finance is risky,” she said. “Asking for a loan is risky. You know the answer, right?”
Crypto has been touted as an egalitarian form of finance, away from banks and their conscious or unconscious biases. It’s the beauty of what Mesidor refers to as “self-sovereign identity” — you don’t need government attention to build the same wealth as your peers.
Yet, others are more skeptical.
“The proliferation of cryptocurrencies and non-fungible assets has become a kind of Ponzi scheme,” NYU’s Faber said of the trend, adding that any aspirations toward racial equity disguised the industry’s risks, which could in fact further erode minority wealth.
“The idea that this can be a democratizing currency is not supported by the facts at all,” Faber said.
And yet, Black investors are still twice as likely to say crypto is their best investment option, according to Ariel and Charles Schwab. After years of research, Mesidor ended a career in politics and dove into crypto full-time in 2017 as head of her non-profit Blockchain Foundation. She is unfazed by bitcoin’s plunge, noting that this isn’t her first crypto winter, but her third.
“We’ve learned that get-rich-quick schemes in this society rarely benefit us,” Mesidor said. “This is not about, ‘oh my god, the price of crypto’. It’s about building products and services, breaking down barriers, creating access for people.”
She says she is in the market for the long haul, and among thousands of tokens, she’s bullish on the biggest.
“I think bitcoin is my north star in terms of crypto,” Mesidor said.
Check out: Personal Finance Insider’s picks for best cryptocurrency exchanges
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