Illustration: Megan Robinson/Axios
The bear market in cryptocurrencies hasn’t entirely scared off some Black investors, who originally embraced the sector as a means to build wealth.
Why it matters: Overnight, battered bitcoin surged back above $20,000 after languishing for weeks close to $16,000. But crypto's winter has wiped billions off the market capitalization of digital currencies; meanwhile, the unfolding FTX scandal has contributed to a lack of trust in financial institutions, and crypto itself.
Zoom out: In 2020 and 2021, the volatile asset class became a hot topic among Black social media users. They viewed digital currencies as a path to bridging the economic gap, creating wealth, and democratizing the global financial system.
State of play: To be sure, retail crypto buyers are hardly ignoring the mounting risks (it's hard not to). Yet Black investors are slightly more bullish on crypto than their white counterparts, according to a survey conducted by Ariel Investment and Charles Schwab in April 2022, around the time the crypto rout picked up speed.
What they’re saying: Deidra McIntyre, founder of Black People & Cryptocurrency, a discussion group rooted in Bitcoin's technology, told Axios in a statement that crypto crime and trading losses are dominating public opinion. That may be hindering their ability to see crypto’s longer-term potential.
Yet investors like Ivan Eberhart are still hodlers. The Atlanta resident bought Bitcoin back in 2017, then invested in Binance coin and Chainlink. Eberhart will continue in the space because of what he sees as a bright future.
Cryptocurrencies like Bitcoin and Ethereum are a longer term store of value, Edwardo Jackson, CEO and founder of Cinema Draft LLC tells Axios.
Yes, but: FTX's stunning downfall burned a lot of investors, with more shoes still to drop. It put celebrities under the microscope for their role in amplifying crypto to small investors.
The bottom line: With mistrust in crypto soaring among investors of all races, Black crypto buyers are like everyone else: Struggling to figure out the next move. And while interest remains high, it’s not clear if that will continue.
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