Why was the Black American Investors community hit worse by the market crash than others?

Black investors have been known to be prudent and conservative when it comes to investing but recent surveys show quite opposite findings

When the market conditions went extreme lately, it caused widespread losses that were so bad that it affected almost every other asset and every possible entity related to the crypto industry. Investors all around the world have more or less been at losses given the hit that the market has witnessed resulting in many cryptocurrencies losing their grounds and facing a severe downturn, including top cryptocurrencies. But several studies came out claiming that even among the investors who experienced the losses on their investments, Black American investors had faced even broader losses.

As per the recent survey, since the start of this year, about 25% of investors who owned cryptocurrencies belonged to black American community while in contrast only 15% of them were white investors. This shows that black investors had more interest and investment in cryptocurrency assets, so their high chances of facing the losses make sense. The survey also found out black Americans are more likely to purchase crypto assets and consider them as their first investments over any other assets.

So this analysis makes this clear as if those who stay closer to the explosion, get affected the most. Similar happened with black investors when the crypto market imploded where the market worth more than $3 trillion had seen a massive drop in its value and slid even below $900 billion. This was a huge loss, and black investors have a huge portion in the investment, so eventually, they share a similar fate when it comes to the loss.

Closer and higher exposure of black investors makes them prone to face vulnerabilities during the extreme market conditions. However, ironically neither the black community is wealthy enough to make investments recklessly, nor historically they are known to be conservative when it comes to investments. For a very long time, they had comparably less trust in the stock market and such other assets than white Americans, as per the surveys.

But the paradigm shift in the black community’ behavior towards investment could have taken place due to several reasons. It was first their anticipation to get more financial stability and financial status in society, considering the history of oppression and discrimination that now demands equality and similar opportunities.

Further, crypto-assets marketing is also responsible for their shift towards cryptocurrencies, where they had been projected as a chance that could make them money and make them wealthier. Such promotion gets more blows from celebrities endorsing and sponsoring them, including popular black Americans like Snoop Dogg, Jay-Z, Floyd Mayweather and many more.

There is a need for awareness within black investors as crypto investments are not something to treat like ‘get rich quick schemes. They might need to learn more about it and more education about the same rather than lucrative advertisements.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing