Cryptocurrency is not the financial promised land

In November, Miami Mayor Francis Suarez, who is committed to making his city the crypto capital of the world, announced that he was taki...

In November, Miami Mayor Francis Suarez, who is committed to making his city the crypto capital of the world, announced that he was taking his next paycheck in bitcoin.

Not to be outdone, then-newly elected New York Mayor Eric Adams tweeted that he would take his first three paychecks and throw them into the cryptocurrency pool.

“In New York we always go big so I’ll be taking my first THREE bitcoin paychecks when I become mayor,” Adams tweeted. “NYC is going to be the center of the cryptocurrency industry and other fast-growing innovative industries! Wait!”

And then it all went to pot. For both men.

On January 21, Adams, Suarez and the rest of the world watched the cryptocurrency crash, taking a 47% drop from its record high in November. People haven’t lost their shirts; they lost their pants, shoes, socks and underwear.

Just look at Los Angeles Rams wide receiver Odell Beckham Jr., who opted to take his $750,000 salary in Bitcoin. It was a huge gamble that didn’t pay off. After the Bitcoin crash, Beckham reportedly net somewhere around $35,000 on that salary if he cashed in now. Don’t worry about poor Odell though – he still has several team incentives that could earn him around $3 million this year, so he’ll be fine.

But for paycheck workers who can’t bet a year’s wages on what essentially amounts to Monopoly money, cryptocurrency has become a pipe dream or a mythical golden ticket to wealth and freedom. financial that might as well be about as real as a 7-Eleven in the middle of the Mojave Desert. Some black people really believe that cryptocurrency is a bridge to close the wealth gap, or that it has the magical ability to undo years of redlining – which effectively ruined property values for black people – and the economic impact of racism in financial institutions.

In 2021, Time magazine covered the Black Blockchain Summit on the campus of Howard University. It was the first paragraph of the article: “At the Black Blockchain Summit, there is almost no conversation about making money that does not involve the possibility of release.”

A study found that in 2021, black and Latinx people made up 32% of the US population and 64% of the nation’s unbanked. After decades of being systematically excluded from banking services or forced to pay higher interest rates or higher transaction fees than their white counterparts, it makes sense that cryptocurrency seems like a way to get rich. But, is it even worth it?

I don’t say that lightly. I’ve spent days researching cryptocurrency to get a solid foundation and deep understanding, and I still have no idea what it is. Well, that’s not entirely true. It’s like Disney dollars but less tangible, less transactional and less stable. Seriously, this is a real definition of cryptocurrency that I found on a page titled “What is Cryptocurrency? [Everything You Need To Know!]

“Cryptocurrency is an internet-based medium of exchange that uses cryptographic functions to conduct financial transactions. Cryptocurrencies leverage blockchain technology to gain decentralization, transparency, and immutability.

Despite these intense definitions and the use of what is called a “blockchain”, this has not stopped blacks and Latinx people from investing in the highly volatile mystery money. According to recent surveys by Harris Poll and provided to USA Today.

I don’t know if every new get-rich-quick investor involved in cryptocurrency fully understands what they are investing in. Yet something tells me that hearing the stories of small investments turned into big profits. shared on social networks might have something to do with it. Add to that years of being denied fair banking, or higher fees for nominal transactions, or being completely devalued as a customer, and I understand the fascination of jumping on the money bandwagon earlier, even if you don’t have all the facts.

“I usually ask people two questions when they come to me to put their money into cryptocurrency: what is your goal and what is your time frame?” Joel Harrison, head of Harrison Affiliates, who spends his days investing, coaching and advising on all things stock, told HuffPost. “These are the questions most people can’t answer.”

And maybe that’s because when digital currency first emerged, people of color were bombarded with celebrities pushing crypto at them like it was some new underground railroad out of financial slavery. He felt almost predatory.

Cobinhood has Jamie Foxx Endorses What They Claim To Be The World’s First Free Cryptocurrency Exchange. Cobinhood started out as one of the biggest crypto exchanges, but in 2021 it started cutting integral parts of its setup, including live customer service.

In 2018, boxer Floyd Mayweather and producer DJ Khaled served as paid promoters of the now-defunct Centra Tech cryptocurrency. The whole thing turned out to be a scam, and Centra Tech founders Raymond Trapani, Sohrab Sharma and Robert Farkas “were found guilty of attempting to defraud investors with their ICO (initial coin offering)” , according to Launderer’s report.

When CashApp started accepting Bitcoin, they needed someone to reach the right audience with their message. That person was Hot Girl Enterprises CEO MC Megan Thee Stallion, who noted during her ad, “bitcoin for hotties“, that “With my knowledge and your hustle, you’ll have your own empire in no time.”

Mike Tyson even has his own bitcoin app, “Mike Tyson Bitcoin”. The brand wallet, created by the company Bitcoin Direct, allows users to store, buy or sell bitcoin digital currency.

“Tyson is a universal star,” Bitcoin Direct CEO Peter Klamka said in a press release, per CNBC. “People of all ages all over the world know Mike Tyson, and as such Tyson’s potential to expand the Bitcoin market is spectacular.”

And that’s exactly it! If people believe in the endorsement of Mike Tyson, or flamboyant millionaire Floyd Mayweather, or famous music makers DJ Khaled and Megan Thee Stallion, so they don’t necessarily need to know what they’re selling to want to buy.

But don’t listen to me. Hear from the wise financial advisers of the Wu-Tang Clan. In 1993, the island of Shaolin The natives gave us the helpful acronym to remind us of the importance of sound financial decision-making: “CREAM (Cash Rules Everything Around Me)”.

In 2017, it was announced that Wu-Tang member Ghostface Killah was launching a cryptocurrency company.

One of the company’s top brass was suspicious of the rapper’s influence on people who might listen to his speech without fully understanding what he’s talking about.

“I think celebrity interest is a bit of a double-edged sword,” said Brett Westbrook, chief executive of Cream Capital. CNBC.

“I personally think that anything that puts cryptocurrencies in front of ordinary people’s eyes is a good thing for the markets in general. On the other hand, I think it’s important for celebrities to know the importance of their endorsements and understand the underlying principles of blockchain technology,” he said.

“The last thing we need is a household name promoting what turns out to be an ICO scam.”

And therein lies the problem. Digital currency is such a place of opportunity for many people who have felt rejected by traditional banking services. They see digital currency as an alternative way to get rich. Unfortunately – and this is the sweet part that won’t be said out loud – the most likely, most likely group to view cryptocurrency the same way they would roulette in Vegas, are people of color.

“There has been a long history of discrimination in investments,” said John Gerzema, CEO of Harris Poll. USA today. “And that could be why we’ve seen a broad demographic of interest and inclusivity in crypto – because it’s new, open, and apparently has fewer barriers to entry.”

So you have this magic money train, an underserved banking community, and black celebrities pushing cryptocurrency at them. I mean, what could go wrong?

According to Federal Trade Commission, People in their 20s and 30s reported losing significantly more money to crypto counterinvestments than any other type of fraud.

“Since October 2020, reports have skyrocketed, with nearly 7,000 people reporting losses of over $80 million on these scams. Their median reported loss is $1,900,” the FTC reported.

But Harrison said that’s only a problem if you don’t know what you’re doing. That might be most of us, given that cryptocurrency doesn’t come with the friendliest explainers.

“Statistically, cryptocurrency has been the biggest wealth generator over the past 10 years,” Harrison said. “But the one thing I don’t like is the way people approach the crypto market. They don’t understand value or market capitalization. And that’s where you’re going to make your money.

Ahhh, yes. Market capitalization. Understood.

Harrison thinks the hip-hop community, superstar athletes, and the world’s wealthiest people talking about the impact of crypto have helped black people get interested in currency.

“You have Nas rapping about it, Elon Musk and Apple CEO Tim Cook talking about it, and once you start hearing the richest people in the world talking about it, it becomes really mainstream,” he said. -he declares.

Harrison isn’t worried about the big loss to Odell Beckham Jr. “He’ll be fine,” he said. Large drops have already occurred. He added that he had been buying a bit of bitcoin every two weeks for three years.

“And I’m fine,” Harrison said.

Well, I’m ready to invest. Now if someone could just explain what I’m investing in.

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Newsrust - US Top News: Cryptocurrency is not the financial promised land
Cryptocurrency is not the financial promised land
Newsrust - US Top News
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