Maya and Mapalo discuss how women tend to approach money and finances and why this can be either a positive or hold them back from taking necessary risk. Sean Sanders and Louis Buys from crypto platform Revix join the discussion sharing their experiences, not only on how women investors approach crypto-assets, but also their own investing strategies, their successes and mistakes.
Narrowing the crypto investment gender gap is a win for all
This post was sponsored by Revix.
When it comes to saving for the future, women have started to catch up with men. The number of female investors, however, remains low, and this is even more so when looking at those who focus on alternative asset classes such as cryptocurrencies.
When it comes to private capital, the global gender gap is narrowing slowly. According to global data by the Boston Consulting Group, private wealth held by women grew from $34 trillion (28% of the total) in 2010 to $51 trillion (30%) in 2015. By next year, the company expects female investors to hold $72 trillion (32%).
202 years to close the gender wealth gap
“This is progress, but it is slow progress, and it is not impacting the current economic gender divide,” says Sean Sanders, a former investment banker and co-founder of Revix, a fintech company that facilitates cryptocurrency investments in South Africa and which recently launched in the UK.
“At the current rates, it will take 202 years before we can close the global gender economic gap, according to the World Economic Forum.”
While many women save for a rainy day, often more so than men, most don’t invest. “This certainly applies to South Africa,” says Sanders, referring to statistics published in 10X Investments’ 2019 Retirement Reality Report.
The report notes that 42% of women neither save nor invest, 37% use cash savings vehicles to preserve their wealth and a mere 16% invest in order to generate wealth.
According to a joint global survey produced by Hootsuite and US creative agency Wearesocial, South Africa ranks as the top country for cryptocurrency ownership relative to its internet population. The report states that 11% of South African internet users own some form of cryptocurrency, while the global average presently stands at 5.5%.
While user numbers vary among cryptocurrency exchanges, much like traditional asset class investments, it appears that women investors represent a notable minority.
“Our own current customer base is made up of just 8% women,” says Sanders. “People are still a bit wary of cryptocurrencies – or as we call them, crypto-assets – like Bitcoin and Ethereum, because of historical volatility.
However, investing in crypto-assets can offer higher risk-adjusted returns and diversification benefits compared to some of the other more traditional asset classes,” Sanders says, noting that crypto-assets are ranked as the best-performing asset class of the last decade.
“In early November 2019, the value of Bitcoin stood at R139 060, compared to R55 049 on 1 January this year. That is a 153% growth in 11 months. By ignoring crypto-assets as part of their investment strategy, women, in particular, are missing out on the opportunities to grow their wealth with fewer risks and higher returns.”
Less sensitive to turbulence
Sanders explains how traditional investments such as stocks and bonds are more sensitive to economic and political turbulence than cryptocurrencies. “This is why it is important to diversify your investment portfolio, ensuring it contains different asset classes, including alternative investments that aren’t tied to the same risk drivers.”
As such, Revix offers prepackaged ‘Bundles’ of reputable cryptocurrencies such as Bitcoin, Litecoin, Ripple and Ethereum. This provides investors with diversified exposure to more than 85% of the crypto asset class without needing to bet on one single cryptocurrency nor having to deal with the complexity of this industry.
“Relying on low-interest savings accounts to generate long-term wealth won’t work for individuals who want to save for retirement or for buying a home. Investing in a diversified set of low-cost index funds that provide exposure to different low-risk and high-growth asset classes will have better results, particularly if you include crypto, which is outperforming all other traditional asset classes. Today, it is an essential component of a healthily diversified portfolio targeted at growing capital.”
Sanders adds that a more gender-diverse crypto investor base will not just narrow the wealth gap that exists between men and women, but it will also strengthen and improve the perceptions around the overall cryptocurrency investment sector.
“Diversifying the crypto-asset investor base will result in more investors, which is good for the future of cryptocurrencies,” says Sanders. “Women form 50% of the global population. They must, as such, be included if we want to grow the industry.”