The investment landscape is rapidly evolving, and the way in which people invest is changing with it. For many Black Americans, higher risk assets such as cryptocurrency are their first step into investing. According to a 2022 survey by Ariel- Schwab, 25% of Black Americans currently own cryptocurrency, compared to only 15% of white Americans. Among Black investors under 40, that figure jumps to 38%, indicating that younger Black Americans are more likely to invest in this high-risk asset class.
The survey also found that Black investors are twice as likely to say that cryptocurrency was their first investment, with 11% of Black investors reporting that cryptocurrency was their first investment compared to only 4% of white investors. Additionally, nearly a quarter (23%) of Black investors under 40 reported that they first invested in the stock market through cryptocurrency.
Perception of Risk
Despite the volatility of cryptocurrency values and platform hacks, Black investors are less likely than white investors to think that cryptocurrency is a risky investment. This education gap is evident in the survey, with only 68% of Black investors believing that cryptocurrency is risky, compared to 73% of white investors. Black investors are also more likely than white investors to believe that cryptocurrency is safe (33% vs. 18%) and regulated by the government (30% vs. 14%). This mindset is even more common among Black investors under 40, with 51% believing that cryptocurrency is safe and 41% believing that it is government-regulated.
Ranking Crypto as the Best
The survey found that Black investors are twice as likely to rank cryptocurrency as the best investment choice overall, with 8% of Black investors reporting that cryptocurrency is the best investment choice compared to only 4% of white investors.
The Education Gap
These findings indicate that Black Americans are exploring different investment opportunities and taking risks in the investment landscape. However, the survey also highlights an education gap between Black and white Americans. Black Americans may be more likely to invest in cryptocurrency, but they are less likely to recognize the risks associated with this investment.
While this is a positive trend that can lead to greater financial opportunities, it is essential to ensure that investors, regardless of race, have access to education about the risks and rewards of different investment opportunities. As the investment landscape continues to evolve, it is crucial to ensure that everyone has equal opportunities to participate in the market and to make informed investment decisions.