Bitcoin (BTC-USD), the premiere digital currency first introduced in 2009, raised eyebrows this week when it dropped below $40,000 for the first time in three months, stoking fears of uncontrolled volatility. But by Wednesday, the coin’s price had risen back to $43,000 and many financial leaders are predicting Bitcoin to surpass $75,000 before the year ends.
The quick recovery proved to many crypto enthusiasts that Bitcoin is here to stay. Now, some investors are highlighting Bitcoin for the opportunity it presents at leveling the playing field, particularly for Black Americans, many of whom have been disadvantaged by traditional banks for decades.
“Bitcoin is absolutely a tool for social justice,” Charlene Fadirepo, a former audit manager at the Federal Reserve Board of Governors turned Bitcoin adviser, told Yahoo Finance. “If you think about Black Americans, we believe that Bitcoin allows [us] to build generational wealth. And not just Black Americans … Latino Americans, the LGBT communities and Indigenous communities. It allows communities to build wealth in communities that have been left out of the discriminatory banking system that we have today.”
Fadirepo called 2021 a “breakout year” for Bitcoin, noting that major banks had had high-net-worth clients invest in it and large corporations have begun accumulating Bitcoin and holding onto it as an asset. At least seven major banks, including CitiGroup, JP Morgan & Chase and Morgan Stanley, have made large investments in Bitcoin.
“The big picture is so bright for Bitcoin,” said Fadirepo, who in 2019 founded Guidefi, a fin-tech platform that aims to make it easier for women and professionals of color to find their ideal financial advisers. “If you look at Bitcoin on a 10-year basis, they’ve had annualized returns of 200% and if you look at Bitcoin in the past two years of this pandemic era, Bitcoin had returns of 400%. Gold had a return of roughly 15% and the S&P delivered 42%. So those are amazing returns for any kind of asset class and incredible returns for Bitcoin.”
“You saw the FDIC and the Fed work together for inner-agency guidance and we expect to see more and more movement and more regulatory clarity,” she added. “And as we know when regulatory clarity is here, that builds trust, that builds security and that will encourage more people to invest and hopefully more institutions to invest.”
Many marginalized Americans see Bitcoin, and the bigger umbrella of cryptocurrency, as a chance to finally control their own success in the future, absent any kind of government intervention.
“What we really need to be doing is to now utilize the technology behind blockchain to enhance the quality of life for our people,” Christopher Mapondera, co-founder of BillMari, the largest Pan-African Bitcoin wallet provider using blockchain technology, told TIME last fall.
Following 400 years of slavery in America, and decades of fighting for civil rights, the racial wealth gap in the U.S. remains stark. According to Federal Reserve data from 2019, the median net worth of the average white household was $188,200, nearly eight times greater than that of the average Black household at $24,100. Disproportionate access to credit and loans, generational effects of redlining and a lack of banks in Black communities have all played a role in the wealth gap.
Progress towards equity in these arenas for the most disadvantaged communities has been slow, but many Black Americans see crypto as a prime opportunity to course correct. In fact, a recent Harris poll found that nearly one in four Black Americans owns cryptocurrency, outpacing any other race in America, including white Americans 3 to 1.
Brandon Buchanan, founder and managing partner of Meta4 Capital, a crypto-focused investment management firm, is one of the leading Black crypto investors that sees promise in the space.
“Black people in particular are very connected to culture,” Buchanan told Yahoo Finance last month. “If you think about the internet and you think about memes, all you have to do is check the vernacular. Check what’s happening in culture and music and certainly Black folks are on the front foot of that.”
Fadirepo ultimately believes women of color, especially Black women, will lead the Bitcoin revolution when all is said and done.
“Women of color are the fastest group of entrepreneurs in the country,” she said. “We are so focused on taking women from financial health to financial wellness to hopefully financial independence and … we believe that Bitcoin and investing in Bitcoin is going to be a huge part of that story for the average Black woman and the average woman of color.”
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Source: https://finance.yahoo.com/news/bitcoin-tool-for-social-justice-ex-government-regulator-turned-crypto-adviser-123417764.html