FT | “We do not like to get left behind when it comes to new technology,” she said.
The promise of cryptocurrencies as a wealth builder has been supercharged by celebrity endorsements, sponsorships and advertising. Prominent black Americans including the musicians Jay-Z and Snoop Dogg, the boxer Floyd Mayweather, the actor Jamie Foxx and the film-maker Spike Lee have promoted crypto to their communities.
Lee appeared in commercials for crypto ATM operator Coin Cloud last year, saying that “old money is not going to pick us up; it pushes us down” and “systematically oppresses”, whereas digital assets are “positive, inclusive”. Last month, Jay-Z announced a partnership with former Twitter chief executive Jack Dorsey to launch a “Bitcoin Academy” literacy programme in the Brooklyn public housing complex where he grew up.
Such celebrity endorsers have faced heavy criticism for getting paid to sell high-risk investments to people who may not have the resources to weather crypto’s volatility. “Ninety-eight per cent of these cryptocurrencies were not designed to do anything other than extract money from people’s bank accounts,” said Najah Roberts, a former financial adviser and the founder of cryptocurrency education centre Crypto Blockchain Plug. “This is not ‘get rich quick’,’’ Roberts added. “There are massive targeting ads that are targeting our community.”
Bellanton said it is not adverts but the prospect of financial freedom, a lack of the investment minimums common for mutual funds, and a feeling that the blockchain distributed ledger is more transparent than big banks that draws in first-time investors.
“The reason that minorities at a higher rate than others are adopting crypto is precisely because if you’re not already rich, it’s way cheaper to send [USD Coin, a stablecoin asset] than to send a wire,” said Brian Brooks, chief executive of blockchain company Bitfury, at the Aspen Ideas Festival last month. “It’s just cheaper.
The entire system is cheaper and faster. It doesn’t have all these entry barriers where you can only get it if you’re already rich.” Despite the risk of losses, many black investors are staying invested in the market. Dennis McKinley, 41, has been buying the dip against the advice of his financial adviser. He said his crypto coins now constitute roughly 30 per cent of his overall portfolio, held alongside equities.
“Young black America is just now getting to a point where we have the amount of freedom to have the opportunity to invest in alternative strategies besides just real estate,” said McKinley, a small-business owner in Atlanta. “I think that it’s important to learn and get out there.”
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