Can Cryptocurrency Help Bridge the Gender Wealth Gap?

Illustration with women investing

The Balance/ Joyce Chan

Cryptocurrency has typically been considered a male-dominated arena. Research by social trading and brokerage platform eToro revealed that as of January 2021, only 15% of Bitcoin traders and 12% of Ethereum traders on its platform were female.

But that’s changing. eToro pegs an overall surge in demand for crypto assets on its platform to this new wave of female investors. Trading app Robinhood also saw a seven-fold increase in the number of women trading crypto on its platform in March 2021, compared to the end of 2020.

Some industry watchers believe that more female crypto investors will have an impact that far exceeds the gains to their wallets.

“It’s going to lead to wealth creation that we can use to do good things with,” Elaine Asher, director, Corporate Treasury at Anchorage Digital, said while speaking on “To Bitcoin, or Not to Bitcoin? A Panel for the Crypto-curious,” at the 2021 Finance Festival. The virtual event, hosted by Ladies Get Paid and Public.com, focuses on empowering women to take control of their wealth and future.

Asher explained that she’s passionate about getting more women investing in cryptocurrencies and believes that more money in the hands of women can have a far reaching impact.

Not only can building wealth through investments help women overcome the gender wage gap and support them through their longer life expectancy, but it may also help businesses and have a social impact. That’s because research has shown that the typical, socially responsible investor is a young, single female who is less wealthy, but better educated than their non-socially responsible counterparts.

“We're going to fund nonprofits. We're going to help poverty. We're going to help each other,” Asher said. “We're going to fund each other's businesses. We're going to seed more women entrepreneurs.”

Investments can help women close the wealth gap with men and reach those financial goals, and a portfolio that includes cryptocurrency could be the key. 

Cryptocurrency for Creating Wealth

For the one year between April 20, 2020 and April 19, 2021, Bitcoin’s value increased nearly 720%. The S&P 500, meanwhile, only saw a return of 44.83%.

But it’s not an apples to apples comparison. While there may be news of its spectacular returns, cryptocurrency is a newer type of investment that comes with risk. Cryptocurrency prices also tend to be extremely volatile which may put off women investors who, research shows, tend to be more conservative than their male counterparts. 

Bitcoin, for example, saw its price cross $1,000 for the first time in January 2017. Since then it’s been a rollercoaster ride, with Bitcoin surpassing $19,000 by the end of 2017, dropping to a little above $3,000 just one year later, and then rebounding to climb to a high of more than $64,000 in April 2021.

If you just got “sticker shock” from the price of Bitcoin, you’re not alone—women tend to be more protective of their disposable income, according to Cleve Mesidor, founder of National Policy Network for Women of Color in Blockchain.

The good news is that you don’t need to buy a whole Bitcoin and can invest whatever amount you’re comfortable with through fractional shares. These Bitcoin investments can be as little as $1. Starting small could help you build your wealth.

There are, of course, risks involved with investing in Bitcoin and similar cryptocurrencies as with any other investment product. So investors should weigh their risk appetite.

“If you're risk averse, don't put everything that you own into Bitcoin, but definitely get off zero,” said Bitcoin Frankie, a cryptocurrency influencer who started the Instagram account @bitcoinbesties.

Bitcoin may even be considered more of a “buy and hold” investment, Asher said.

“I think there's going to be one day where you never sell your Bitcoin, you just borrow against it back and forth ... because it's going to be that strong of a store of value,” she said.

Access to Capital and Payment Systems

According to the World Bank, more than 1.7 billion people across the globe lacked a bank account as of 2017, and 56% of them were women. Applications of cryptocurrency and blockchain include decentralized finance and remittances, which could help those who remain unbanked.

Historically, women have had less autonomy over their finances, according to Aubrey Strobel, head of communications at crypto-rewards app Lolli. Crypto investments may offer them a way to “opt out” of a financial system that hasn’t worked for them, she said.

Strobel’s point may be tied to the fact that the underlying blockchain technology helps make cryptocurrency transactions smoother and cheaper.

“Blockchain has the potential to cut costs, speed up transactions, and promote greater financial inclusion by streamlining cross‑border and remittance payments,” Lucy Gazmararian, then-associate director of Crypto and Fintech Advisory for PwC Hong Kong, said in an October 2020 report. “These powerful innovations will transform payments infrastructure for people, businesses, and governments.”

Women, typically in the Latinx communities, send back remittances, and money transfer services take a big chunk out of those transactions, Mesidor said.

“If we can actually disrupt the remittance process, more women who support other family members can keep more money and ensure that their family members get more of that money,” she said.

Mesidor added that women who are skeptical about investing in cryptocurrency have another “access point” to get some exposure—they can use “side hustles” to set up merchant accounts and accept Bitcoin as payments.

Cryptocurrencies like Bitcoin are finding more mainstream acceptance with a growing number of financial services providers, too. Overstock.com was an early adopter of Bitcoin payments in 2014, while Tesla had stated on its website that it was accepting Bitcoin as a form of payment (though that page was removed in May 2021 after Elon Musk reversed that decision). Visa and PayPal also provide options for conducting cryptocurrency transactions.

“It's a great way for them to start accumulating cryptocurrency and also have access to a new marketplace,” Mesidor said.

Women who have money can also then offer capital to other women entrepreneurs in need. In 2020, funding to female-led startups declined “dramatically,” according to business information site Crunchbase.

Unfortunately, “until we have women writing big checks and funding other women,” Asher said, there’s a cycle of men funding other male entrepreneurs that is unlikely to break. 

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.