“The future is Crunk!” declares a digital recreation of a young LeBron James in the ubiquitous television commercial promoting Crypto.com.
That means hype.
Cryptocurrency is hot, especially for African Americans. I’m still trying to figure it out.
The online Oxford Dictionary defines “cryptocurrency” as “a digital currency that uses encryption techniques to regulate the creation of units of currency and verify the transfer of funds that operate independently of a central bank.”
Everyone has heard of the most widely used version, Bitcoin.
Los Angeles Lakers icon LeBron James has partnered with Crypto.com to teach children crypto blockchain technology, according to a January CBS News report.
Crypto.com will work with James’ foundation to provide education and development opportunities for workers in emerging technologies, including in underserved neighborhoods, the report said.
Others getting into crypto include producer Jay-Z, rappers Ice Cube and Snoop Dog, famed filmmaker Spike Lee, boxing legend Floyd Mayweather Jr., and so on.
In the Crypto.com TV ad, James offers a younger version of himself life tips to the beat of hip-hop. “Fortune Favors the Brave,” the ad reads.
That brings me to Jonathan Jackson, the businessman son of Rev. Jesse Jackson, who defeated 16 other candidates for the seat in Illinois’ 1st congressional district in the June 28 Democratic primary.
The not-so-secret sauce that helped Jackson snag the coveted nomination: more than $1 million in campaign contributions from political action committees linked to cryptocurrency interests, according to news reports. That included about $500,000 in TV advertising for Jackson, courtesy of Protect Our Future, a PAC backed by cryptocurrency billionaire Samuel Bankman-Fried.
These are all strong signs that black people are being taken – and are being taken – seriously by the explosive wave of interest in cryptocurrency.
Black entertainers, athletes and entrepreneurs are lining up to invest and lend their names to marketing campaigns.
Black consumers are blinded by the lure of Bitcoin, Ethereum and Dogecoin and the promise of big easy money for some.
A 2021 Pew Research Center survey of U.S. consumers found that 18% of Black adults had invested in, traded in, or used a cryptocurrency, compared to 13% of White adults.
According to a survey conducted by NORC at the University of Chicago, about 44% of Americans who trade cryptocurrency are black.
More than a third of respondents to this June 2021 survey reported annual household income of less than $60,000; 55% had no college degree.
The chorus of crypto disciples are calling it a game changer for those marginalized by America’s banking and investment systems.
“Blockchain technology is revolutionizing our economy, sports and entertainment, the art world, and how we interact with one another,” James said in the CBS report.
The tire icon hopes educating young people about the technology will help bridge the digital divide. “I want to make sure communities like the one I come from are not left behind,” James said.
But crypto is a dubious solution to this massive problem.
In fact, black consumers all too often rely on the proliferating currency exchanges, payday loans, and pawn shops that plague our communities. When an unexpected disaster strikes, we’re less likely to have life, auto, and health insurance to help ease the trauma. We engage in financial planning, traditional investments and entrepreneurship at lower rates than other groups.
But crypto investing is a glittering ornament on a tree that could rot. The industry has been criticized for a lack of regulation, transparency and consumer protection. The digital system makes it very vulnerable to fraud, and crypto fraud is on the rise.
Since early May, more than $700 billion has been lost to “a devastating crypto crash that has left investors in financial ruin and forced companies like Gemini to cut costs,” the New York Times reported last month.
As it stands, from cradle to grave, African Americans are in dire need of financial literacy and ways to build individual, institutional, and generational wealth.
A 2019 analysis by the Institute for Policy Studies examined the ongoing and deepening “racial wealth gap” in America. Between 1983 and 2016, the mean household wealth of a black family fell by more than half after adjusting for inflation, compared to a 33% increase for the mean white household.
The average black family owned $3,600 – 2% of the average white family’s wealth. The average Latino family owns $6,600 — just 4% of the average white family.
I’ve tried in vain to get my millennial nephews to bank, save, and invest, but there’s little glamour.
Because of this, marketing campaigns are branding crypto as hip, or as the kids would say, “Gucci.”
But when marketers are targeting black people, the bright red flags should be waved high. We’ve been targeted for everything that bothers us: cigarettes, vaping, alcohol, lottery tickets, sugary pop, fast food and more.
African Americans don’t need to add cryptocurrency to our list of dangers.
Laura Washington is a political commentator and longtime journalist based in Chicago. Her columns appear in the Tribune every Monday. Write to her [email protected].
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