Who Loses

Chapter 11 – “Will Cryptocurrency be the Money of the Future?”

According to Pew, 16% of all Americans have invested in, traded, or otherwise used a cryptocurrency. Black investors have been quick to adopt crypto in their portfolios. While only 13% of white Americans have invested in this asset, 18% of black Americans have. 

Some African Americans believe the decentralized nature of the asset makes it less likely for racist policies or business practices to interrupt investment. Black celebrities like Spike Lee, Megan Thee Stallion, and LeBron James have been promoting these assets. 

Advertisements for crypto have appeared on subways in NYC and aired during the Superbowl. Crypto seems to be joining a long history of scam products that target black Americans,  with promises of riches that are nearly impossible to actually obtain. 

It’s not just one particular group that loses using crypto, it’s roughly 50% of users. Investing money in a bank or the stock market means an investor is making money because other people are using their money to make valuable things. If you invest in the stock market or a bank, the people who use your money will give you the amount of money you lent them back to you over time, as well as some percentage of their profits in the form of interest, dividends, and stock buybacks. The borrower benefits by using your money and you benefit with more money: capitalism 101. 

With cryptos and NFTs, the only way to make money is to buy at a lower price than you sell at. For every winner–for every person who buys low and sells high–there is one person who lost by selling as the price lower or getting stuck with the coin when the price plummets. Crypto expert and UC Berkeley professor Nicolas Weaver said, “the profits that are given to the early investors are literally taken from the later investors.”

“Will Cryptocurrency be the Money of the Future?”

A Journey to Personal Financial Success

At Morgan Franklin Fellowship (MFF), we support the concept of financial freedom – by teaching participants how to save by paying themselves first, invest for their future and grow their net worth.

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