A software developer twice invested his savings in cryptocurrencies, only to lose it all. But he still promotes it to the Black community and would like to get back in himself.
A recent college graduate and a single mom are dabbling hopefully in bitcoin after attending a crypto workshop sponsored by rapper Jay-Z at the public housing complex where the hip-hop star grew up.
But a former executive at a cryptocurrency exchange feels disillusioned by the false promise of crypto helping her family in Ethiopia's war-torn Tigray region.
All were drawn by the idea of crypto as a pathway to wealth-building outside of traditional financial systems with a long history of racial discrimination and indifference to the needs of low-income communities.
But crypto's meltdown over the past year has dealt a blow to that narrative, fuelling a debate between those who continue to believe in its future and skeptics who say misleading advertising and celebrity-fueled hype have drawn vulnerable people to a risky and unproven asset class.
The collapse of two crypto-friendly banks this month, Silvergate Capital Corp. and Signature Bank, complicates the picture.
Their failure was a setback for crypto companies that relied on the banks to convert digital currencies to US dollars.
Yet the crisis bolstered Bitcoin, the oldest and most popular digital currency, by reinforcing a distrust in the banking system that helped give rise to cryptocurrencies in the first place.
Mariela Regalado, 33, and Jimmy Bario, 22, neighbours at the Marcy Houses complex in Brooklyn, started putting USD 20 or USD 30 into bitcoin every two weeks or so after attending Bitcoin Academy, a workshop sponsored last summer by Jay-Z and Jack Dorsey, co-founder of Block Inc., the parent company of mobile payment system Cash App.
I don't see it as something that's going to, you know, take me out of Brooklyn and buy me a USD 2 million mansion in Texas, said Regalado, an educational consultant and mother of a toddler.
But if it happens, I'm all for it.
Only a small minority of the US population owns cryptocurrency, but adoption increased during the COVID-19 pandemic as low interest rates made borrowing money and investing in risky assets more attractive. Prices peaked in 2021, and a constellation of apps, exchanges and even ATM-like crypto machines made buying digital coins easy.
But the drawbacks of crypto played out dramatically after prices cratered in 2022, wiping out millions in investments and leading to a cascade of bankruptcies and layoffs at crypto exchanges, lenders and other companies. Along with its volatility, crypto lacks protections such as deposit insurance since it's not controlled by any single institution. Largely unregulated, the industry is susceptible to scams, hacks and fraud.
Cryptocurrencies are built on decentralized ledgers usually blockchain allowing peer-to-peer transactions without a middleman like a bank or government. That continues to appeal to many people who face barriers to traditional wealth-building avenues such as homeownership, college education, or the stock market, said Terri Bradford, a payment specialist at the Kansas City Federal Reserve, who has researched crypto's popularity among many Black investors.
It doesn't appear that a whole lot of people are dissuaded from crypto even though we have observed what has happened, Bradford said.
According to Pew Research Center polls in 2021 and 2022, some 20 per cent of Black, Hispanic and Asian US adults have bought, traded or used cryptocurrency, compared with 13 per cent of white adults.
Bradford's research, which examined data from Pew Research Center and the Board of Governors of the Federal Reserve System, found that Black investors are more likely to own crypto than stocks or mutual funds, while the opposite is true for white investors.
Black and Latino crypto enthusiasts have formed social media groups, written books and organized summits to promote minority developers in the space and champion blockchain technology's potential to create more equitable systems in finance and beyond.
But crypto companies also sought to capture a broader market of retail investors through lucrative sponsorship deals with celebrities and sports teams, many aimed directly at Black and Hispanic consumers by touting crypto as an economic equalizer.
Coin Cloud, a company that makes ATMs for cryptocurrencies and which has filed for bankruptcy, launched an ad featuring movie director Spike Lee deriding old money" as exploitative, oppressive and white," and crypto as positive" and "inclusive.
Tonantzin Carmona, a Brookings Institute fellow who researches crypto's impact on minority communities, said that for inexperienced investors, this sort of high-profile hype easily obscures crypto's drawbacks.
Carmona considers crypto's marketing to racial minorities part of a legacy of predatory inclusion in the tradition of payday loans and subprime mortgages risky services that promise access to financing that would otherwise be out of reach.
You'll have a marginalized group, a community that has been historically excluded from accessing products, services, opportunities, and all of a sudden they're told that they will get access to maybe some type of alternative, Carmona said.
But this access often comes with conditions that undermine the benefits or that will reproduce insecurity for these very same communities.
Rahwa Berhe first started investing in crypto while studying alternative financial products during a master's degree program at the University of Washington in Seattle. The Chicago native tried to forge a career in crypto, leading a compliance team for digital assets at an exchange for four years, only to feel isolated as a Black woman.
It's like you took all the tech bros and the finance bros and put them together. I didn't know where I fit in, Berhe said.
Her disillusion deepened when crypto couldn't help her family in Tigray during the conflict there from 2020 to 2022 because the lack of infrastructure and access to electricity made transfers impossible. When she tried to point out these realities to some in the crypto community, she was dismissed as negative by social media posters breezily celebrating that the hashtag #eth, for Ethiopia, was introducing people to the digital coin Ether.
Berhe now works with a Stanford University research lab exploring how decentralized web tools can be applied to archiving Africana artifacts. As for cryptocurrency, she is done for now.
It was great until it wasn't, Berhe said.
Crypto advocates argue minority communities deserve access to a potentially lucrative asset class that isn't going away. Many believe another boom is inevitable and liken last year's collapse to the dotcom bust of the 2000s, which, far from dooming the tech industry, only weeded out bad actors and bolstered winners like Amazon.
Andre Mego, Bitcoin Academy's program manager, said crypto is an accessible way to teach financial literacy to a community where many find concepts like wealth-building investment abstract and out of reach. At the end of the summer workshop, participants were each gifted USD 1,000 in bitcoin, most of them through Cash App, which launched bitcoin trading in 2018.
When we talk about accessibility, that provides motivation. Because for anybody thinking about investment, they could think, 'That's a big thing in the future. That's something that I have to save up so much money for. I don't know if I'm allowed to do this. Am I even part of this conversation? Mego said.
Bario said Bitcoin Academy's workshop at the Marcy Houses complex was his first meaningful introduction to personal finance, though he graduated last spring with a degree in economics from Lafayette University. Growing up, he said, investing was not a realistic possibility in his family, which relied on income from his father, who worked as taxi driver back in Honduras.
I always thought, as soon as you get your money, it's time to spend it as soon as you get that Friday paycheck, said Bario, who now works as a soccer coach.
Omid Malekan, who teaches a course on blockchain and cryptocurrency at Columbia Business School, said he hopes the latest crash will disabuse people of the idea that crypto is a reliable avenue for getting rich quick. But Malekan said the crypto industry needs more diversity, not less, and that young Black and Hispanic people should be encouraged to pursue careers in developing a technology he believes will be the future of finance.
The people who are attracted to crypto because of the way the technology works and because of the promise of a more global, more accessible financial system those people, it takes more than just prices going down to scare them away," Malekan said.
Tyrone Norris, the software developer, said he learned to be cautious about how to buy crypto the hard way.
Growing up in Washington, D.C., Norris studied computer programing in high school and took college courses, but never graduated because he couldn't afford to go full time. He has worked as a contractor, moving around the country and never owning a home or accessing a workplace retirement plan.
When Norris first decided to invest in crypto, he poked around on exchanges and chose MANA, a token powering the 3D virtual world Decentraland, because it shared his ex-girlfriend's name and he saw it as a sign.
He went all in, emptying his bank account of USD 4,000. When his MANA investment doubled, he started betting on whichever coins he thought would be most lucrative.
But one exchange turned out to be scam, and another based in New Zealand lost millions in a hack.
Norris's investment went to zero, but two years later, he got back in the game with another $5,000. Again, he watched it soar, then crash as the 2022 crypto winter set in.
I was a rookie I didn't understand what I was doing. I was putting my crypto into dangerous places, Norris said.
For now, he is taking a break from software development to focus on building a crypto-backed hip-hop gaming project. Norris said he has no regrets because investing introduced him to the possibilities of the blockchain.
I come from nothing, he said. I don't come in expecting anything to be fair.