‘Over recent months, it is mainly men who have bought in to cryptocurrencies’ - Financial Times

7/2/2018

Bitcoin: why is it so male-dominated?

‘Over recent months, it is mainly men who have bought in to cryptocurrencies’

HANNAH KUCHLER

Hannah Kuchler

A decade older than my brother, I take some things for granted. I have a professional job, a degree, a credit card; he stays up later than me, knows the cool music and can travel for months at a time. So it came as a surprise to find that his investments were raking it in — because, unlike me, he has put money into bitcoin and other cryptocurrencies.

Perhaps even more painful to admit, he encouraged me to buy bitcoin five years ago, when it was worth about $100, far below the $7,088 it is at the time of writing (or the almost $20,000 it was at its peak). It was an offer only a 17-year-old boy could propose: give me your money, I’ll invest it in bitcoin and give you a share of the proceeds. It turns out — even after the recent fall in bitcoin — it was an offer I was foolish to decline.

I am not alone. Ask most people outside Silicon Valley whether they own any bitcoin, and the answer will still probably be no.

So what do early adopters have in common? One factor is gender. As bitcoin and other cryptocurrencies such as Ethereum have soared over recent months, it is mainly men who have bought in.

Accurate data on who holds the anonymous currencies are hard to find, but Uphold, a virtual currency wallet service that does background checks on its users, says 75 per cent are men, while Coin Dance, which tracks statistics on the bitcoin community, found 97 per cent of engagement was from men. If men like my brother were riding high on returns, why weren’t women?

Cryptocurrencies are, of course, risky: their price is highly volatile and in some cases their digital exchanges have been hacked.

Anna Dreber, an economics professor at the Stockholm School of Economics, studies differences in risk tolerance between men and women. She cites one study that showed a 64 per cent probability that a random man would be prepared to take more risk than a random woman. Yet that alone is not enough to account for the difference between male and female bitcoin investors.

Much is down to information flow. Bitcoin and cryptocurrencies first became popular in the geekiest parts of the tech and finance industries, both male-dominated. The early word was spread mainly on Reddit and forums for discussing video games. Mt Gox, once the biggest exchange for virtual currency before it was hacked, started life as a platform for trading playing cards for a fantasy game called Magic: The Gathering.

Stephanie Hardesty, an investor who also describes herself as a bitcoin anthropologist, says she became interested in the currency in 2013 for two reasons. First, a male friend who was a software developer started telling her about bitcoin. Second, she found bitcoin allied with another interest of hers: cross stitch. After discovering she could cross stitch the QR codes that link to bitcoin wallets, she now keeps her public address as cross-stitch code on her desk at work and her private key safely offline, in a cross-stitched cold-storage wallet.

Hardesty believes that as cryptocurrencies become more mainstream, they are attracting more diverse investors: more women, more people of colour and more leftwingers.

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Why women stay away from bitcoin

Many in the field are working to make cryptocurrencies more accessible. There are women leading crypto-related companies and in top roles at banks such as Blythe Masters, a former JPMorgan Chase banker who runs blockchain start-up Digital Asset Holdings, and Amber Baldet at JPMorgan.

Of course, now bitcoin is more mainstream there may be far less money to be made — and there’s a lot of risk attached, as its price drop of almost 50 per cent since the start of the year shows. When we spoke, Hardesty thought it would be better late than never for me, a “sad no-coiner”, to buy bitcoin.

Her advice is to avoid the sometimes complex process required to buy and store cryptocurrencies, head to a bitcoin ATM and lock the receipt in a fire-safe box. Or I could just ask my brother for help. Then again, given the latest market turmoil, maybe I’ll start calling myself a “lucky no-coiner” instead.

Hannah Kuchler is an FT correspondent in San Francisco