Women's Crypto Investment Trends: Who And How Many?

Despite an increase in women investing in cryptocurrencies, there is still a significant gender imbalance in the world of crypto. Twice as many men as women invest in cryptocurrency, according to a CNBC and Acorn survey. This gap is larger than the existing gap within traditional investments, including stocks, ETFs, mutual funds and real estate. However, more women are increasingly investing in cryptocurrencies, with Australian crypto exchange BTC Markets reporting a 172% increase in female users in 2022, compared to an 80% increase in male users.

Women are twice as likely to be left out of crypto investing as men

Women are twice as likely as men to be left out of crypto investing, with only 15% of women investing in crypto compared to 38% of men. This gender disparity in crypto investing is even more pronounced than the existing gender gap within traditional investments such as stocks, ETFs, mutual funds, and real estate. Several factors contribute to this disparity, including a lack of knowledge, risk aversion, and the male-dominated nature of the fintech industry.

Lack of Knowledge

One of the main reasons women are less likely to invest in crypto is a lack of knowledge about digital currencies and the financial system. Many women feel that they don't know where to start or that crypto is too complicated to understand. This is often compounded by misleading information and the complex presentation of ideas in the crypto space. Additionally, the use of jargon and male-dominated marketing materials can make the industry seem unwelcoming to women.

Risk Aversion

Biologically, women tend to be more risk-averse than men when it comes to financial decision-making. They are more likely to take their time and try to understand something before jumping in, which can lead to a lower propensity to invest in volatile assets like cryptocurrencies. Women are also more likely to be turned off by the notorious volatility of crypto and the lack of regulation in the industry.

Male-Dominated Industry

The fintech industry, in general, is male-dominated, and the crypto space is no exception. This can create a self-reinforcing cycle where women feel less inclined to enter a male-dominated field, and the industry becomes even more male-dominated as a result. Additionally, crypto community events, conferences, and online communities are often made by men for men, further contributing to the gender imbalance.

Breaking the Cycle

To break the cycle of women being left out of crypto investing, it is important to address the barriers that prevent their participation. This includes creating educational resources tailored to women's needs, making the industry more inclusive, and highlighting the benefits of crypto investing for women, such as financial independence and wealth accumulation. By taking these steps, the crypto industry can become more diverse and inclusive, allowing women to reap the same benefits as men.

Women are more risk-averse than men

There are several reasons why women may be more risk-averse than men. One reason could be biological. For example, women have been found to have higher levels of the hormone oxytocin, which is associated with risk aversion. Additionally, women may face greater social and economic consequences for taking risks, as they are often the primary caregivers and are expected to be more cautious.

The difference in risk aversion between men and women has implications for various areas, including the labor market and the crypto market. In the labor market, women may be less likely to choose high-risk, high-reward career paths, which could contribute to the gender pay gap. In the crypto market, women may be less likely to invest in riskier assets, such as cryptocurrencies. This could contribute to the gender gap in crypto investing, where twice as many men as women invest in cryptocurrencies.

To attract more women to the crypto market, companies can take several steps. These include creating educational materials and training courses tailored to women's needs, emphasizing the benefits of crypto investing, such as financial independence, and showcasing ordinary women who are successfully investing in crypto. By taking these steps, companies can help to make the crypto market more inclusive and accessible to women.

Women are less confident in their investing abilities

This lack of confidence is also reflected in the crypto space. Women make up only about 8% of all crypto users, according to a 2019 study. A more recent report from the Australian cryptocurrency exchange BTC Markets found that while female participation increased by 172% over the past year, it still lags behind the growth in male participation, which increased by 80%.

There are several factors that contribute to women's lower confidence in investing:

• Upbringing and Socialization: Girls are often rewarded for being "good" and "perfect" in school, which can create a fear of taking risks and making mistakes. Boys, on the other hand, are more likely to be scolded and punished, which teaches them to take failure in stride. This dynamic carries over into adulthood, with women feeling the need to be perfect before taking action, while men are more comfortable with risk-taking.
• Biology and Brain Chemistry: Differences in brain structure and chemistry between men and women can also play a role. For example, women tend to have larger anterior cingulate cortices, which are involved in recognizing errors and weighing options. This may contribute to women's tendency to ruminate on past mistakes and be more cautious in their decision-making.
• Hormonal Influences: Testosterone, which is found in higher levels in men, is associated with risk-taking and confidence. Estrogen, on the other hand, may discourage risk-taking and encourage bonding and connection.
• Systemic Barriers and Biases: Women face additional challenges due to systemic biases and barriers in the financial industry. For example, women are often paid less than men for the same work, which can impact their financial confidence. Additionally, women are often underrepresented in leadership positions and may face discrimination or harassment when they attempt to enter male-dominated fields.

Despite their lower confidence, women often outperform men in investing. Studies have shown that women tend to make more profitable investment decisions and are better at managing their finances. This may be because their lower confidence leads them to be more cautious and well-informed before making investment decisions.

Women are less likely to be founders or fund partners in crypto

Women are underrepresented in the blockchain and cryptocurrency industry, with men outnumbering women in both investment and founding roles. This gender disparity is not unique to the crypto space, as women have historically faced challenges in accessing financial services and pursuing entrepreneurial endeavours.

In the UK, 84.3% of blockchain and cryptocurrency companies are founded by all-male teams, while only 4.36% are founded by all-female teams. This disparity is partly due to the challenges women face in obtaining funding and the lack of female role models in the industry. Obtaining initial funding is crucial for startups, and all-female teams are less likely to receive equity investment than mixed-gender or all-male teams. However, once they do receive funding, female-led companies are more likely to attract follow-on investments.

The gender gap in cryptocurrency investing is also significant, with twice as many men as women investing in crypto, according to a CNBC and Acorn's survey. This gap is larger than the existing gender gap in traditional investments such as stocks, ETFs, mutual funds, and real estate. The crypto industry has been promoted as a way to democratize finance and increase investor diversity, but it has not yet succeeded in attracting a significant number of women investors.

Women face various barriers to investing and starting businesses in the crypto space, including a lack of access to funding, a lack of financial literacy, and online communities where male users harass women. Additionally, women-owned businesses often struggle to secure investment capital, with women-led startups receiving only a small fraction of venture capital funding.

Despite these challenges, there are some positive signs for women in the crypto industry. Studies have shown that blockchain companies with mixed-gender teams are more successful than those with all-male teams, and female investors have outperformed men in recent years due to their greater risk aversion. Furthermore, women are turning to crypto to bypass restrictive traditional monetary systems and gain greater financial independence and freedom.

Women are more likely to seek education before investing

The desire for more education before investing could be driven by a greater focus on financial security and a more cautious approach to investing among women. In the Grayscale study, 60% of women prioritized financial security over building wealth, and they were less likely to invest in bitcoin due to its relative newness as an asset class. Similarly, a survey by Fidelity Investments found that women were more likely to save and exhibited a greater ability to evaluate and mitigate risks when investing. This tendency to be more risk-averse is also reflected in trading behaviour; women trade less frequently than men, suggesting a more structured and cautious approach.

The preference for education among women interested in crypto could also be influenced by the male-dominated nature of the industry. Women may feel that they need to acquire more knowledge to overcome the gender imbalance and build their confidence in investing in crypto. This is supported by the fact that despite their interest, many women still find crypto and blockchain technology difficult to understand. Additionally, women may face barriers to entering the crypto space due to the complex presentation of ideas, technical jargon, and male-dominated community events and online forums.

To attract more women to the crypto sphere, companies and media outlets should create educational content tailored to women's needs and highlight ordinary women working with crypto, not just prominent figures. Providing clear and accessible information, emphasising the benefits of crypto investing, and creating female communities can help make the industry more inclusive and encourage women to take advantage of the opportunities crypto offers.

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