In recent years, women have made strides to level the playing field in the male-dominated world of investing typified by Hollywood movies like The Wolf of Wall Street and The Big Short, which revel in their depictions of macho investing and trading floor culture.
And while progress has been slow, it’s been even slower in the cryptocurrency sphere — which many still associate with the infamous “bitcoin bros” or “crypto bros” you’re likely to run into on Reddit and other social platforms.
A recent Investor Junkie survey backs this up: Our survey revealed that just 3% of women bought cryptocurrency in the past year, compared to 23% of men.
But there’s far more to this story than meets the eye. Many of the barriers holding women back from investing in cryptocurrency are the same as those that have affected female investors at large. However, cryptocurrency is unique when it comes to its place in blockchain technology and the way women view it as a potential addition to their investment portfolios.
The Gender Investing Gap
The fact that women invest less in cryptocurrency is hardly surprising. Data has consistently shown us over the years that women invest less overall than their male counterparts.
Our recent Investor Junkie survey found that 44% of female respondents participated in the stock market, compared to 60% of men. And not only are men more likely to invest, but they also invest more. Our study of 1,200 Americans ages 18-60 found that nearly half of women invest less than $1,000, with the most common reason being that respondents don’t have additional spare money to invest.
The Relationship Between Cryptocurrency and Tech
The cryptocurrency gender investing gap is the result of far more than finances. Cryptocurrency is just one part of the larger blockchain ecosystem, which lacks gender parity overall.
According to Gate.io Chief Marketing Officer Marie Tatibouet, solving the disparity in cryptocurrency investing requires addressing the lack of women in the blockchain and technology fields. “Since cryptocurrencies sit at the very intersection of these two fields [finance and tech], this problem is further exacerbated,” Tatibouet said, citing work from professor and researcher Angela Walch.
Data from the U.S. Census Bureau shows that women made up just 27% of STEM workers in 2019. And while this is up from 8% in 1970, there’s still a long way to go.
“I think this lack of women in crypto investing is more a question about lack of experience, and is tied to the fact that there are very few women in tech and finance in general,” Tatibouet said.
Systemic Barriers Still Exist for Women
Many of the systemic barriers that have kept women from participating in the traditional financial system at the same rates as men still exist today. In 2020, women earned 82 cents for every dollar that a man earned, according to data from the U.S. Department of Labor. This disparity is even greater for women of color.
Investor Junkie’s recent survey results were consistent with these figures. About 35% of female respondents reported an annual income below $30,000, compared to just 21% of male respondents. And only 5% of female respondents reported an annual income over $150,000, compared to 11% of male respondents.
It’s easier to understand how less disposable income translates to less money being invested, whether it be in cryptocurrency or traditional investments.
Another systemic barrier is simply a lack of information directed at women. Age Wave studied the March 2018 issues of 17 top women’s magazines; of 1,594 pages of editorial content, just five pages covered personal finance.
“There is not only a lack of credible information, but that information is not reliably being sourced into the top women-focused educational platforms,” said Chloe Elise, the CEO and founder of the financial education company Deeper Than Money.
Not only is there a lack of financial information, but there’s a difference in the financial education being provided to men and women — and it starts at childhood. Parents are more likely to teach their sons to build wealth, including through investing, while they’re more likely to teach their daughters to budget and save.
Despite these systemic barriers, there are steps that women can take to make cryptocurrency more accessible. “While we can’t dismantle a broken system today, what we can do is take empowered steps to learn for ourselves what we want our wealth-building journey to look like,” Elise said.
Taking a Measured Approach
One of the factors that likely holds women back from investing in cryptocurrency at the same rates as men is that women tend to have lower risk tolerances, and cryptocurrency is an inherently high-risk investment.
According to Tally Greenberg, the head of business development at Allnodes, they ways women approach investing could be an asset in cryptocurrency. Women tend to be less impulsive investors than men, preferring to buy and hold for long periods. Greenberg argues that this strategy is well-suited to cryptocurrency, which is volatile in the short term, but could result in significant long-term growth.
“If we prefer to hold our assets and don’t change our portfolios constantly, then cryptocurrency is a great place to do it,” Greenberg said. “If you hold, you have a greater chance of potential income. Things tend to go up, even if there are setbacks like the past few months.”
Data shows that the more measured approach that women take to investing is effective. A 2017 survey from Fidelity found that while only 9% of women believe themselves to be better investors than men, they actually perform better by 0.4%, or 40 basis points.
How Can Women Start Investing in Crypto?
Women who are interested in getting involved with cryptocurrency but aren’t sure where to start should start slow. According to Elise, investing with small amounts that you can afford to lose can make female investors feel more comfortable dabbling in cryptocurrency.
“I’ve invested in crypto only after making sure I have an emergency fund, maxed out retirement accounts, other investments and more,” Elise said. “Then, I’ve been able to invest in crypto without being emotionally attached to the volatility. Crypto can feel like a wild ride, but when you are only investing ‘extra’ money and not money that your wealth-building depends on, you can sit back and enjoy the ride — learning more about how crypto works and what its future looks like.”
Depending on where you live, there may be even more options available than investing only in individual cryptocurrencies.
“For women looking to participate, if they aren’t ready to go ahead and buy assets, then consider buying an ETF related to blockchain,” Greenberg said. “We have lots of them in Canada. You won’t own the cryptocurrency in that case, but at least you’ll be in the game by dipping your toe in, so to speak.”
While cryptocurrency exchange-traded funds (ETFs) aren’t currently available in the United States, that’s expected to change in the future. And just as ETFs have served as a way to make stock investing more accessible, they can do the same for cryptocurrency.
Whether you start with individual cryptocurrencies or ETFs, the most important first step is education. As with any other type of investment, it’s critical that you understand what you’re investing in before parting with your money.
There’s more information available today than ever before. As cryptocurrency becomes increasingly mainstream, more websites, podcasts, and other educational resources have entered the space to provide necessary information for investors and prospective investors.
The Investing Industry Responds
While women must ultimately make the decision of whether to participate in cryptocurrency and blockchain, the responsibility also falls on companies to make the industry more accessible.
Some firms have already begun to acknowledge the gap and have taken steps to address it. One example is Robinhood, a popular commission-free brokerage firm that also offers cryptocurrency trading.
In a March 2021 statement, the company cited a study that found women would be more interested in cryptocurrency if there were more educational resources available to them. In response, Robinhood is working to provide more educational content.
Making blockchain and cryptocurrency more accessible isn’t just about educational resources and tailoring marketing materials to attract female investors. It’s also about attracting more women to work on technology. According to Tatibouet, hiring more women into crypto and blockchain companies is a critical step to closing the crypto investing gap.
“What women need right now are more role models,” Tatibouet said. “We need more Cathie Woods, more Laura Shins, and more Kathleen Breitmans. Give women a hero that they want to be like, and see the huge repercussions and the ripple effect that this decision will make in the overall fintech landscape — not just crypto.”