The price ofBTC-USD, the world's first digital currency, raised eyebrows this week when it dropped below $40,000 for the first time in three months, stoking fears of uncontrolled volatility. By Wednesday, the coin price had risen to $43,000 and many financial leaders are forecasting thatBitcoin will surpass $75,000 by the end of the year.
Some investors are highlightingBitcoin for the opportunity it presents to level the playing field, particularly for Black Americans, many of whom have been disadvantaged by traditional banks for decades.
Charlene Fadirepo, a former audit manager at the Federal Reserve Board of Governors, told Yahoo Finance thatBitcoin is a tool for social justice. If you think of Black Americans, you believe thatBitcoin allows us to build generational wealth. 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 forBitcoin, noting that major banks had had high net worth clients invest in it, and large corporations have begun accumulatingBitcoin and holding onto it as an asset. At least seven major banks, including Morgan Stanley, JP Morgan Chase and CitiGroup, have made large investments inBitcoin.
Fadirepo founded Guidefi, a fin-tech platform that aims to make it easy for women and professionals of color to find their ideal financial advisers in 2019 because the big picture is so bright, said Fadirepo. If you look at Bitcoins on a 10 year basis, they had annualized returns of 200% and in the past two years of this epidemic, they had returns of 400%. The S&P delivered a return of around 15% and gold delivered a return of around 15%. These are amazing returns for any kind of asset class and incredible returns forBitcoin. She said that the Fed and the FDIC worked together for inner-agency guidance and that they expect to see more and more movement and more regulatory clarity. As we know when regulatory clarity is here, that builds trust, that builds security and encourages more people to invest and hopefully more institutions to invest. Some marginalized Americans view Bitcoin and the bigger umbrella of cryptocurrencies as a chance to control their own success in the future, despite government intervention.
Christopher Mapondera, co-founder of BillMari, the largest Pan-African wallet provider, told TIME last fall that we need to use the technology behind the block chain to improve the quality of life for our people.
After 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 the 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. Access to credit and loans, the effects of redlining and 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 it as a prime opportunity to correct. According to a recent Harris poll, nearly one in four Black Americans own cryptocurrencies, surpassing any other race in America, including white Americans 3 to 1.
Brandon Buchanan, the founder and managing partner of Meta 4 Capital, is one of the leading Black investors that sees promise in the space.
Buchanan told Yahoo Finance last month that black people are very connected to culture. If you think about the internet and you think about memes, all you have to do is check the vernacular. Check out what's going on in culture and music and Black folks are on the front foot of that. Fadirepo believes that women of color, especially Black women, will lead the Bitcoin revolution when all is said and done.
She said that women of color are the fastest group of entrepreneurs in the country. We believe thatBitcoin and investing inBitcoin is going to be a big part of the story for the average Black woman and the average woman of color because we are so focused on taking women from financial health to financial wellness to hopefully financial independence.