Some minority investors say crypto is still an important investment, even after the big crash this year. According to a survey, 25% of black investors and 15% of white investors own cryptocurrency. Meanwhile, a famous investor explains the crypto money he calls ‘my north star’. On the other hand, experts are voicing their concerns about the exposure of minority investors to the risks in the crypto market.
How did Cleve Mesidor awaken to the cryptocurrency world?
Cryptocurrency entered the mainstream in 2013. At the time, Cleve Mesidor was an appointee in the Obama administration’s Department of Commerce. As a favor to a friend, Mesidor helped him prepare a press release about Bitcoin. He was quite uninterested and unaffected at the time. Despite this, in just a few years, Mesidor has immersed itself in the crypto world. He then quit his job to become a full-time representative of the industry and a committed investor.
Mesidor’s awakening to the crypto world came when he watched ‘Dope’, the movie about a group of Black youths using Bitcoin to thwart a financial criminal. He says the film sparked a vision in the mind of crypto as a pathway to racial equality as a vehicle for people left out of the traditional financial system. This kind of awakening is a common experience for minority investors who say they are optimistic about crypto and continue to hold on even as the market suffers from a steep sell-off this year.
A black-and-white look at the world of cryptocurrencies
NYU professor and social inequality expert Jacob Faber is trying to understand the perspective of people like Mesidor. According to Faber, this is the result of a long history of discrimination in the financial system. Evidence of bias that exists in everything from opening a bank account to taking out a mortgage to starting a business.
A survey was published in April by Ariel Investments and Charles Schwab. The survey shows that 28% of Black Americans distrust banks. Only 18% of white Americans hold this view. 56% of blacks also say they are not respected by financial institutions. This is something Mesidor can relate to. She remembers her and her family’s experiences of being denied credit or being mistreated by bank employees.
The result has, over time, caused many Black and minority investors to either stay locked up or withdraw from traditional investment opportunities available to white investors. Probably the result was that he was lured by decentralized (and often riskier) investments. According to the Federal Reserve Board, only 34% of Black Americans own stocks, compared to 61% of White Americans. However, this ratio is reversed when it comes to cryptocurrencies. Research shows that 25% of black investors own crypto, compared to just 15% of white investors.
Do cryptocurrencies reduce or increase inequality?
This also means that Black investors are more exposed to the crypto crash of 2022. cryptocoin.com As you follow, the total crypto market cap dropped nearly $2 trillion from its peak in the last crash. The leading cryptocurrency Bitcoin, on the other hand, fell from $ 69,000 to just over $ 20,000. But Cleve Mesidor says the trend towards digital assets is only natural for Black investors. He explains it as follows:
If traditional finance has worked for you, you see crypto as risky. You see it as speculative. For those of us who are locked in, traditional finance is risky. Asking for a loan is risky. You know the answer, right?
Cryptocurrencies were launched away from banks and their conscious or unconscious biases. It has also been claimed to be an egalitarian form of finance. That’s the beauty of what Mesidor calls ‘self-sovereign identity’. You don’t need government attention to build the same wealth as your peers.
However, others are more skeptical. “The proliferation of cryptocurrencies and Non Fungible Assets has become a kind of Ponzi scheme,” says NYU’s Faber. At this point, he adds, any aspirations for racial equality actually obscure the risks to the industry that could further erode minority wealth. “The idea that it could be a democratizing currency is not supported at all by the facts,” says Faber.
“Leading cryptocurrency is my north star”
Still, Black investors are still twice as likely to say crypto is the best investment option, according to Ariel and Charles Schwab. After years of research, Mesidor ended his career in politics. He dived into crypto full-time as president of the nonprofit Blockchain Foundation in 2017. He was unaffected by Bitcoin’s fall and states that this is not the first crypto winter, but the third. Mesidor says the following on the subject:
We have learned that get-rich-quick schemes in this society rarely benefit us. This is not about ‘oh my god, the price of crypto’. It’s about creating products and services, breaking down barriers, creating access for people.
Cleve Mesidor says it’s in the market for the long term and is on the rise for the largest among thousands of tokens. “Bitcoin is my north star in terms of crypto,” the famous investor says.
