Closing The Wealth Gap: Black America And Bitcoin Adoption
According to Forbes, the median wealth of Black and Latino families could hit zero by 2053. Traditionally, Black Americans lag behind on the wealth scale but the adoption of cryptocurrency, in particular Bitcoin, could allow a change in that narrative through education and dollar-cost averaging.
Investing in bitcoin for African Americans has become a “what do I have to lose” scenario. There is now tons of data on the impact of wealth inequality and how it affects African Americans which is downright shocking to say the least. The Black and Brown community’s wealth gap has widened through Jim Crow segregation, redlining, mass incarceration, high unemployment and lack of financial literacy. Bitcoin is not centralized by an entity, corporation, person or country, meaning it is not controlled by a single authority or managed in one place. This lack of centrality removes the fundamental flaw of bias. Bitcoin does not care what you look like, what culture you come from, your gender or your religious background.
Due to this, bitcoin is attractive to those typically disenfranchised from obtaining wealth, such as African Americans and other groups from diverse backgrounds. Adoption among this demographic is surging; a recent Harris Poll survey found that in the U.S., 30% of Black and 27% Hispanic investors own cryptocurrency, compared with just 17% of White investors. Even outside of the United States, in places like Nigeria, bitcoin trading volume and remittances are the highest on the continent being the key drivers to adoption.
Getting Off Zero Through Unorthodox Education
Typically, financial literacy is taught and passed down to each generation. I can speak for myself in saying discussions about money happened on two occasions: when you didn’t have any and when someone owed you some. I also had to learn about bitcoin under these odd circumstances, while trying to remove my fiat way of thinking. Many African Americans fall behind on educating themselves about bitcoin and the basics of financial literacy, but that, too, is changing.
Due to this lack of access, people within the African American community are using unorthodox methods to gain an education about Bitcoin and blockchain technology. Learning the complexity of Bitcoin is no walk in the park, even for those who are deemed tech savvy. In my opinion, books like “Bitcoin and Black America” by Isaiah Jackson, “Bitcoin and Black Powernomics” by Will Hobdy and “From Bars to Bitcoin” by Justin Rhedrick are great places to start learning about Bitcoin from the Black perspective. Social media applications like Clubhouse have the highest focus for African Americans seeking education and a network of like-minded individuals focused on crypto.
Clubs such as Black Bitcoin Billionaires, Crypto for Black Economic Empowerment and Crypto Church have attracted hundreds of thousands of members. A wide range of topics are discussed in this hybrid cross between a podcast and a call-in radio network, including getting your investment knowledge off zero where anyone from anywhere can ask questions or give advice on topics like Bitcoin.
Long-Term Digital Saving
In honor of the historic Black Tulsa, once the epicenter of Black wealth in America, the well-known actor and author Hill Harper has launched a fin-tech app called Black Wall Street — a center of Black business in the Greenwood district of Tulsa, Oklahoma, that was destroyed in a racial attack. Harper encourages all African American investors to buy bitcoin from the app for the long-term through dollar-cost averaging. Harper said, “We have to encourage Black ownership and that’s what we want to do on the platform. We’re starting with a digital wallet and the ability to start to learn financial literacy, create a community, and allow people to invest.”
The average Black family has $38,300 in their 401(k) account by the time they hit retirement. The average white family has a retirement average of $168,000 in their 401(k). This is why bitcoin should be viewed as a form of investment savings for people of color. Statistically, for many African Americans saving money is difficult or downright impossible. Many Americans have less than three months of savings in the event of an emergency.
Bitcoin, on the other hand, is non-confiscatable and has no barrier of entry. Bitcoin is a good savings technology when utilized from a long-term outlook. Traditionally, people in Black and Brown neighborhoods are scammed and sold snake oil schemes to gain wealth and save money, leaving them unbanked. Check cashers and payday loan businesses litter Black and Latinx areas across America. Over the years, that has led to a distrust of banks, lack of savings and debt. Bitcoin fixes the wedge in the wealth gap and is quickly becoming the Plan B to secure asset value for many African Americans.
Buying a whole bitcoin is quite expensive but buying fractional shares is not. You can start with an amount as low as $2. If you save $10 a week for 50 weeks equals $520, which can get you over a half-million satoshis at current bitcoin prices. That’s a good and cheap way to gain exposure to bitcoin and save at the same time. For many people of color, risk tolerance is low, so dollar-cost averaging allows them to endure the volatility of bitcoin price swings. Over the long term, bitcoin has performed at 200% over the last decade. The banks cannot guarantee to give its customers that type of return on savings, so we see a massive departure from banks to bitcoin.
Bitcoin is a treasury reserve asset that is unmatched, and I believe African Americans are waking up to the fact that Bitcoin adoption will allow them to catch up in the wealth race. The Lightning Network will make remittances very easy to transfer. One thing you cannot destroy is an idea, and bitcoin is proving it is better than gold, stocks, bonds, commercial real estate, equities, silver, the whole lot. I believe this form of cross-generational wealth is here to stay in the Black community and is truly just beginning to take hold as an idea of closing the wealth gap.
This is a guest post by Dawdu M. Amantanah. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
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