In 2012, few people in Washington DC thought about cryptocurrencies.
Cleve Mesidor first learned about it around this time, while working for the Obama administration, but he didn't think much of it. A few years later, he was completely "in the rabbit hole" and has been at the forefront of the movement ever since, as cryptocurrency has gone from an outlandish idea to a sprawling ecosystem of digital assets, not to mention profitable.
And like other early proponents of black cryptocurrencies, Mesidor has seen that cryptocurrencies are not only popular with the types of people who generally dominate profitable financial products. More than 3 in 10 black adults are likely to invest in cryptocurrencies overall, according to data from Morning Consult.
Black and Hispanic adults are more likely than white adults to invest in cryptocurrencies and Bitcoin
Respondents were asked how likely they would be to invest in each of the following:
Survey conducted from October 29 to November 29. 1, 2021, among 4,400 American adults, with a margin of error of +/- 1%.
Now it seems that everyone in Washington is thinking about cryptocurrencies.
As digital currency has gone mainstream, money has been pouring onto K Street as powerful new crypto firms jump into the difficult and complicated regulatory landscape. Financial inclusion is a big part of that discussion, and the folks who did some of the first work spreading the cryptocurrency message to the black community are increasingly being pushed out, those early adopters say.
Is cryptocurrency helping to democratize finance and the economy, fulfilling the wishes of early proponents like Mesidor? Or is it a volatile asset that puts black communities at particularly high risk?
Early Black Crypto Users Paved The Way For High Ownership Rates
Black creators and innovators in this space say they've been working on those questions for years.
Since launching into cryptocurrency, Mesidor now leads the National Network of Women of Color Policy on Blockchain and serves as a public policy advisor to the Blockchain Association trade group. Prior to that, she served as the director of public affairs for the Department of Commerce's Economic Development Administration.
He cited statistics from Morning Consult, as well as other research, showing that ownership of cryptocurrencies among black adults is greater than ownership of other financial assets by blacks.
"Color innovators don't get enough credit for being in this space from the start," he said. “We dismissed the fact that people of color globally played a role in creating this, and when you look at some of the findings that black and Latinx adoption has exceeded expectations, it's because of the work that they've been doing. making the color innovators. "
Black adults are also more interested in participating in a variety of crypto-related activities compared to American adults in general, and white adults especially.
Black and Hispanic adults are more open to using a variety of crypto services than the general population
Proportion of adults who said they would use the following cryptocurrency services:
Survey conducted from October 29 to November 29. 1, 2021, among 4,400 American adults, with a margin of error of +/- 1%.
For some of these early influencers, the appeal of cryptocurrency is steeped in history. Sinclair Skinner, co-founder of the website I Love Black People and Black Blockchain Summit, pointed to the past connection of some traditional banks to the slave trade, as well as the political struggles of the civil rights era, such as the red lines and challenges. modern day black communities face. expensive when accessing banking services.
"People are dissatisfied with the status quo and looking for something more," he said. "This crypto thing seems to be something else."
Legacy Financial Firms' Move Toward Cryptocurrencies Could Be 'Worst Fears Coming True' For Black Investors
The cryptocurrency landscape is drastically different than it was even a few years ago. Large financial institutions that once viewed digital investing skeptically are now investing huge amounts of money to meet customer demand to own and trade cryptocurrencies.
It's good, in some ways. Institutional backing means that more people are comfortable investing in cryptocurrencies, which means that early adopters make money as more people shop.
But it also carries the possibility of more regulation, and not necessarily regulation that has black investors in mind.
"In a way, your worst fears come true," said Tani Chambers, who runs Black Women Who Invest. “For years, banks say that cryptocurrency is kind of crazy talk; now everyone has some kind of cryptocurrency department. Now they are at the table, negotiating with regulators and figuring out what this should all look like. "
Without a seat at the table representing the interests of the black crypto community, Chambers said regulation could end up being restrictive and inadvertently preventing black people from making money from crypto rather than ensuring fair access and investors. are protected.
Still, with more interest also comes more risk and volatility, and with such a decentralized asset, scams and fraud can be a huge concern. Black adults could be overexposed to these risks due to high adoption and interest rates, and that is concerning to some regulators.
"As long as there is fool's gold in the crypto space, some of those who will suffer the most will be the least able to bear it," Acting Comptroller of the Currency Michael Hsu said in a September. speaks.
Influential celebrities increase the need to educate black investors
Another facet that comes with the widespread acceptance of cryptocurrencies: the proliferation of new voices in the conversation.
Early black influencers say they have been trying to spread the right kind of information among the black community, but as digital assets have become more popular, so have new voices who have little to no knowledge about investing or cryptocurrency. .
Influencers and celebrities, from Kim Kardashian West to Elon Musk, have started selling cryptocurrencies on their platforms, and the results don't always lead to responsible and informed investment.
"I've seen people give up their last rent money and withdraw their pensions based on Elon Musk's comments and put them into crypto," said Najah Roberts, founder of Crypto Blockchain Plug, a cryptocurrency education hub. "We have to make sure that we are really educating our communities."
Among the list of celebrities and influencers who have spoken out about cryptocurrency, Kardashian West received the broadest name recognition in the Morning Consult survey. Thirty-two percent of black adults said they had "some" or "a lot" of confidence in their financial advice, while 19 percent of all adults said the same.
Musk had the highest confidence level among all adults (43 percent) and black adults (44 percent). Spike Lee, the only major black celebrity on the list, was substantially more influential among black adults (42 percent) compared to all adults (20 percent).
Other recognizable names included on the list were actors, sports stars, and black personal finance experts on social media. Those in the latter group, like @MyFabFinance's Tonya Rapley and @TheBudgetnista's Tiffany Aliche, had relatively little influence among black adults and the general public.
Part of the problem, Roberts said, is the inclination to listen to successful people, regardless of their financial background, and the general prioritization of white and male voices over any other.
"I may be saying the exact same thing about the exact same thing, but they will listen to someone else if there is a choice," he said.
Avoiding Bad Advice From Influencers: Directly Educate Black Investors In Your Communities
Fundamental to the work of these early proponents of cryptocurrencies is what Mesidor calls "finding people where they are."
While black adults are more likely to say they would invest in crypto based on the endorsement of a celebrity or influencer, they are also 9 percentage points more likely than general adults to say they would act on such a recommendation from a family. member or friend, according to the Morning Consult survey.
Going into black businesses, financial institutions and churches and educating friends and family will be a much better solution to the vulnerability that comes with interest in cryptocurrencies, rather than relying on government intervention, crypto advocates said.
That approach, they said, is the best way to ensure that interested members of the black community are not left out of cryptocurrency investment opportunities.
"The history of this country makes us worry about how little we have and we cannot afford to take too many risks with that," Mesidor said. "When we see that there are flaws and problems, we have to satisfy that need, not implement a protectionism that says we are going to prohibit and restrict."
