Black Americans who saw cryptocurrency as a way to close the racial wealth gap and get rich outside of traditional financial methods are now regretting it as the value has hit rock bottom.
Business Insider reports the unregulated cryptocurrency market has taken a nose-dive, leading companies to file for bankruptcy and leaving many Black people with empty pockets.
According to a September Pew Research poll of more than 10,000 U.S. adults, 18% of Black Americans had invested in, traded, or used cryptocurrency, including Bitcoin and Ethereum, compared to 13% of white Americans.
Other polls also show Black people got into the crypto game more than their white counterparts. Ariel Investments Founder John Rogers told The Atlantic it’s not the first time Black people have jumped on a new opportunity only to be burned.
“We saw the same thing happen with the internet bubble when we saw many African American first-time investors chasing hot internet stocks,” Rogers said. “So many people made so much money over the last seven or eight years, and it is natural to fall into the trap of chasing what worked yesterday.”
The cryptocurrency market has suffered significant losses in the last year, losing nearly 75% of its value. Additionally, the downfall and arrest of FTX owner Sam Bankman-Fried last month contributed to the decline of the financial technology.
Black Americans gravitated toward cryptocurrency partly due to a mistrust of traditional financial systems, including banks, which have a long history of discrimination and racism. An April Ariel and Charles Schwab survey showed almost one-third of Black Americans do not trust banks.
Working-class Black Americans trying to get rich weren’t the only ones who jumped into the crypto game and lost. Several notable Black figures, including New York City Mayor Eric Adams, NFL wide receiver Odell Beckham Jr., and rapper Jim Jones, promoted cryptocurrency and lost money during its decline. Large companies, including the National Basketball Association and Major League Baseball, also got in on cryptocurrency.
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