How The Bitcoin Boom In Black Communities Could Bust Banking Institutions
By Sabrina Lynch
- 1 in 3 African American investors own cryptocurrencies compared to 17% of white investors
- 25% of millennial millionaires invest their wealth in cryptocurrencies
After 100 years of systematic racism, fewer African- Americans are investing in stocks, instead turning to the profitable benefits of cryptocurrency and its decentralized model to bring in the big bucks. With 1 in 3 African American investors owning cryptocurrencies compared to 17% of white investors, digital coins, blockchains and NFTs (non fungible tokens) are experiencing exponential growth due to a severe lack of trust in legacy firms. Black Millennials, Gen Z, and teen digital natives changing the financial landscape are turning to online and social media channels to grow their own wealth; leaving traditional banking institutions in their wake. This begs the question, are banks redundant for the Black community?
Why This Matters: As the economy continues to change whilst the world grapples with recovering from the pandemic, the worries of Black youth over their wealth and retirement plans has reached an all time high. Black consumers are turning their backs on the same systems their parents and elders tried to rely on, identifying inefficiencies in savings account packages that work against them rather than in their financial favor. This philosophy extends to all those on the income spectrum, such as rappers who have been relying on NFTs to balance out the holes in the income they lost during COVID. Grammy-nominated rapper Lil Yachty launched his own cryptocurrency, “$YACHTY” selling over 250 million coins in 21 seconds. Not to mention that 25% of millennial millionaires invest their wealth in cryptocurrencies.
Cryptocurrencies are affording people of color the same opportunities to contribute to and earn value from early stage crypto-projects, in the same vein as venture capitalists. The playing field is being re-leveled, predominantly through newfound information available via social media platforms and access to the markets through brokerages such as Public and Robinhood.
A new type of economic relationship has been established between the consumer and the money markets . A clear demonstration of this relationship in action is the huge impact amateur investors made on the stock value of GameStop (GSE -0.75 %), driving up share price by more than 700% in a week. A majority of Black Americans do not have access to people with vast entrepreneurial knowledge, therefore self-empowerment through cryptocurrency has become a necessity to financial stability.
Situational Awareness: Black Millennials and Gen Z are determined to achieve financial wellness by leaning into new, innovative technology, such as blockchain. They are choosing to disconnect from “outdated” traditional investments, building their own self-sufficient communities. As People of Color do not have generations of wealth like other communities, banks need to step up their game to gain any degree of customer loyalty in the future or be blocked out by blockchain.
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