Bitcoin (BTC-USD), the first digital currency first introduced in 2009, raised eyebrows this week when it fell below $40,000 for the first time in three months, stoking fears of runaway volatility. But on Wednesday, the price of the coin had resurrected at $43,000 and many financial leaders are predicting that Bitcoin exceed $75,000 before the end of the year.
The rapid recovery has proven to many crypto enthusiasts that Bitcoin is here to stay. Now, some investors are hyping Bitcoin for the opportunity it offers to level the playing field, especially 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 chief audit officer at the Federal Reserve Board turned Bitcoin adviser, told Yahoo Finance. “If you think about black Americans, we think Bitcoin enables [us] to constitute a generational heritage. And not just black Americans… Latinos, LGBT communities, and Indigenous communities. This allows communities to create wealth in communities that have been excluded from the discriminatory banking system that we have today.
Fadirepo called 2021 a “breakout year” for bitcoin, noting that big banks got wealthy customers to invest and big corporations started hoarding bitcoin and holding it as an asset. At least seven major banks, including CitiGroup, JP Morgan & Chase and Morgan Stanley, have made large investments in Bitcoin.
“The bigger picture is so bright for Bitcoin,” said Fadirepo, who in 2019 founded Guidefi, a fintech platform that aims to make it easier for women and professionals of color to find their ideal financial advisors. “If you look at Bitcoin on a 10-year basis, they’ve had 200% annualized returns and if you look at Bitcoin over the last two years of this pandemic era, Bitcoin has had 400% returns. Gold returned around 15% and the S&P delivered 42%. So those are incredible returns for any type of asset class and incredible returns for Bitcoin.
“You’ve seen the FDIC and the Fed working together for internal 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 there, it builds trust, it builds security, and it will encourage more people to invest and hopefully more institutions to invest.”
Many marginalized Americans see Bitcoin, and the largest cryptocurrency umbrella, as a chance to finally control their own future success, absent any form of government intervention.
“What we really need to do now is use the technology behind blockchain to improve the quality of life for our employees,” said Christopher Mapondera, co-founder of BillHusbandthe largest pan-African Bitcoin wallet provider using blockchain technology, said TIME last fall.
following 400 years from slavery in America and decades of struggle for civil rights, the racial wealth gap in the United States remains stark. According to Federal Reserve Data as of 2019, the median net worth of the average white household was $188,200, nearly eight times that of the average black household at $24,100. Disproportionate access to credit and lending, the generational effects of redlining, and the lack of banks in black communities have all played a role in the wealth gap.
Progress toward equity in these areas for the most disadvantaged communities has been slow, but many Black Americans see crypto as a great 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 Capital Meta4a crypto-focused investment management firm, is one of the leading black crypto investors seeing promise in the space.
“Black people in particular are very culturally connected,” Buchanan told Yahoo Finance last month. “If you think of the internet and you think of memes, all you have to do is check the vernacular. Check what’s going on in culture and music and black people are definitely at the forefront of that.
Fadirepo ultimately believes that women of color, especially black women, will lead the Bitcoin revolution when all is said and done.
“Women of color are the fastest growing group of entrepreneurs in the country,” she said. “We’re so focused on moving women from financial health to financial wellness to hopefully financial independence and…we think bitcoin and investing in bitcoin is going to be a big part of this story for the average black woman and the average woman of color. ”
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