The economy today
African-Americans on the Frontlines of the Crypto Crash
Audio 04:07
In the United States, a quarter of black investors are said to have bought cryptocurrencies compared to only 15% of whites.
© JACK GUEZ / AFP
By: Dominique Baillard Follow
3 mins
In the United States, the black community is the most exposed to the current cryptocurrency debacle.
African-Americans are said to be more fond of these new currencies than whites.
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The craze came with the dizzying rise of bitcoin and its clones.
Because this asset is easy to access, because the potential gains seemed enormous.
African-Americans, especially those under forty, very quickly saw in these virtual currencies the opportunity to make a fortune quickly.
A way to break the glass wall for an economically and historically disadvantaged community.
A universe where there are already legends, like this young black computer scientist who became a millionaire by investing $2,000 in bitcoin.
Terrance Leonard sold most of his crypto assets in 2020 to buy himself a big house in Washington DC.
A dream that comes true for this young man and a deal concluded at the right time.
Because today, with the fall of cryptos,
he would be forced to revise the number of square meters downwards.
A quarter of black investors reportedly bought cryptocurrencies, compared to just 15% of whites.
Tenors of the American black community have been fervent prescribers
Rapper Jay Z, now a billionaire and enthusiastic crypto investor, has opened a bitcoin academy in his New York neighborhood, classes are free all summer.
Director Spike Lee appears in an ad touting cryptos on YouTube.
Acquiring it for a young black man is also making an anti-establishment gesture.
Because black Americans, even today, often feel excluded from the world of finance.
It is complicated in the United States to obtain a loan when you cannot provide proof of your financial history, your employment, or quite simply when you do not have or no longer have a bank account.
This still concerns 13% of members of the black community.
With NFT creations settled in crypto, black artists were also able to finally be recognized and well compensated.
Investing in crypto, a very risky bet
Indeed, black households earn an average of $9,000 per year, compared to $160,000 for whites in 2019. Their savings capacity is therefore much lower, which is why blacks are generally conservative investors, very cautious. in their choice.
And yet, they are twice as likely as whites to choose cryptos for a first investment.
The proselytism of show-business multimillionaires may seem abusive, the bitcoin academy created by Jay Z has been widely criticized.
She would mislead young people who had better not burn their life savings in a daring gamble.
Promises of quick fortune evaporated with the crypto debacle?
The dream of making the great leap in a few months that their parents and ancestors were prevented from accomplishing has taken a hit.
But young people have not completely abandoned this niche, they keep their cryptos until prices go up.
The crypto miracle will not happen.
Not only because their value is collapsing but above all because it would take much more than a hyper-speculative market to reduce the financial gap between whites and blacks.
The black community represents 13% of the American population, but it owns only 3.8% of the wealth of the country.
► In brief
In China, savers harmed by local central banks should get redress
After loudly demonstrating in the Henan region, going so far as to accuse the authorities of inertia, the savers finally succeeded in winning their case and will be able to recover part of their money from Friday.
Four banks in that province have frozen withdrawals since April.
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Economy
Cryptocurrencies
United States