India ranks second in crypto adoption, driven by mostly young investors who constitute a larger section of crypto investors. But women form only a small part of this growing group. That may, however, soon change, according to a new report titled: ‘Five Ways the World of Crypto Will Change in 2022’ that suggests, while crypto currently suffers from a colossal gender gap that’s even wider than in traditional finance, we will see a dramatic shift in dynamics as the number of crypto users balloons from an estimated 300 million to as much as 1 billion by the end of 2022.
Globally, women make up only about 5% of crypto investors, compared to about 24% of investors in traditional equities, said the BitMEX study. While bitcoin was initially built around encouraging financial equity, 75% of crypto holders are men, according to a 2021 State of U.S. Crypto report.
A more inclusive future with crypto
While women remain on the sidelines, the study is optimistic as it said, change is coming this year as crypto becomes more mainstream thanks to intensifying efforts by major players in the sector to promote, educate, and simplify access, not to mention the growing regulatory push to issue clearer guidelines for the benefit of a broad investor base.
“The next phase of mass crypto adoption will set it on the path to becoming the most inclusive asset class ever. Notably, crypto already looks to be more racially diverse than other forms of investment. In America, for instance, people of color are investing in cryptocurrencies at higher rates than they are in either stocks or mutual funds,” the study said.
Given that studies consistently show women are on average more diligent in weighing risks before investing, it is only natural that some prefer to do more research before diving into the world of crypto, and as per the report hat tipping point may soon be here.
“Women make up more than half of the 63% of US adults who identify as “crypto-curious” – meaning they don’t yet own crypto but want to learn more. In 2022, the next influx of adopters will come from this group, potentially shifting the gender balance rapidly,” said the study.
Historical adoption patterns of transformative technologies also suggest women could soon come flooding into crypto. For example, the vast gender gap in PC usage during the 1980s had largely disappeared by 1993, and whereas internet users were predominantly male in 1994, by 2001, more women than men used the internet regularly.
BitMEX analysts noted, this suggests the proportion of crypto investors who are women could scale up much faster than many expect. And let’s not forget that much of crypto’s spread will come from its adoption as a medium for cheap international remittances and its potential recognition as legal tender by at least five developing countries by the end of 2022. This could further narrow the gender gap, particularly in developing countries, where the imbalances tend to be greater.
The crypto gender disparity continues
Even though a confluence of factors driving mass adoption will help turn the tide in 2022, one cannot merely rely on the weight of demographic trends to solve the problem. Closing the gap requires a concerted effort by our community. We think the best way to start is by admitting that many aspects of crypto culture and parlance are exclusionary by nature and need to be reconsidered.
As a recent CoinDCX study shows, only 15% of their current investors are women. This section of female crypto investors is majorly comprised of women from metro cities like Delhi, Bengaluru, Hyderabad, Pune and Lucknow.
As per the data of other crypto exchanges, the percentage of women investors has been considerably low. Unocoin and Coinswitch Kuber also noted that hardly 15% of their investors are women. The number is even low as per the data of Bitbns and CrossTower which report that they have only 10% of women investors on their platforms as of December 2021.
The trend is no different on a global level. Women form only a small percentage of the total number of crypto investors. A 2021 survey by Independent Reserve’s Cryptocurrency Index (IRCI) conducted over 2,000 Australians found that the number of women who currently or have previously invested in cryptocurrencies has risen but still is less than one-fourth of all—the number has gone up from 10.3% in 2020 to 20% in 2021. And in the US, the number of female crypto investors is considerably low as compared to the number of male investors, according to a study conducted by CNBC and Acorn, an investing platform.
Reasons to be optimistic
While gender disparities have dogged the financial services industry for generations, several people and institutions are hoping that cryptocurrency would usher a new era of diversity into the world of finance.
A growing number of female artists, investors and collectors are embracing cryptocurrency and NFTs, and bridging the gender gap. As Pakistan-born artist and women’s rights activist, Maliha Abidi created her first NFT last year. The U.K.-based activist is about to launch Women Rise, a campaign to bring 100,000 girls and women into cryptocurrency by the end of 2022.
Again Tavonia Evans, a U.S.-based data scientist who goes by the Twitter handle @cryptodeeva, created Guapcoin, a cryptocurrency to “amplify the economic voice of the Black community”.
The other example was Kinjal Shah, a senior associate at Blockchain Capital and an investor in the Komorebi Collective for women and nonbinary crypto founders. She sees the potential to build this new financial system differently and hopes more women and minorities will enter the $2 trillion valued market. A graduate of quantitative economics at Tufts University who worked in traditional finance as an analyst at Fidelity Investments for two years before entering the DeFi space, she believes, ““If this is the future of finance, I want more women to be sharing a piece of that pie.”
She partnered with Julia Rosenberg who was actively hiring and recruiting women for her Orca Protocol that has a female co-founder and chief executive, adviser and product design lead.
Needless to say then, there are reasons to be optimistic, as recent studies revealed that women hold about 8.3% of their income into savings (men save only 7.9% of their income). More savings means that women have more power to diversify their investments into high-return assets like cryptocurrencies.
At a recent panel, a senior finance leader said, “Women also tend to evaluate risks in almost everything and mitigate them in the best way possible. Hence, female investors can be more analytical with their investments. While investing in a volatile market such as crypto, their cautiousness helps them into making the right decision.”
As the BitMEX study concludes, as the crypto matures and garners a more diverse and representative user base, we will need to be careful to maintain a welcoming attitude, embrace newcomers, and lower the threshold for inclusion. Doing so will not only help close the gender gap, but also accelerate crypto’s evolution into a truly mainstream phenomenon. In the end, that’s an outcome that will benefit everyone.