Women in Cryptocurrency: Investing Skills, Trends and Representation

It's no secret men outnumber women in key roles in finance and technology. So, when it comes to the hybrid “fintech” of which cryptocurrency is a part, it's not surprising that women are underrepresented even more.

In fact, according to a recent study, 95% of crypto investors are men. This may be due to the fact that men have held the majority of roles in the financial and tech sectors for decades. Add to that only 27% of women are employed in the science, technology, engineering and math (STEM) fields, despite making up nearly half the workforce in the U.S. The likelihood women have degrees in these fields is also diminished.

But there are signs this trend could be changing — especially as women take their investing prowess to this next frontier.

Women vs Men: Who Are Better Investors? 

Despite underrepresentation in the finance sector, recent research suggests that when it comes to long-term investing, women actually outperform their male counterparts, achieving measurably higher returns. 

In a study which looked at the performance of 5.2 million accounts from January 2011 to December 2020, women outperformed men by 40 basis points, or 0.4% a year on average. While that may not sound substantial, over long periods of time this edge can yield significant margins through the power of compounding interest. 

Another study found that when comparing investing behaviors of men and women, men were found to be “overconfident.” While confidence on its face is a beneficial attribute, attempts to “time the market” can lead to excessive trading — costly for long term performance. Men who were considered active traders saw returns reduced by 2.65% per year. Women who actively traded also trailed their less active counterparts, but still less than men, losing just 1.72% per year.  

Overconfident investors may overestimate their precision and thereby the expected gains of trading. More frequent trading also increases costs, results in taxes and, therefore, leads to less compounding capital over time. 

Women in the Growing Cryptocurrency Market

While female representation in cryptocurrency is still minimal, more women seem to be taking the leap by investing in this space. CoinMarketCap, a price-tracking website for crypto assets, saw a 43% increase in female users in the first quarter of 2020, while some brokerages saw female activity surge by 7 times 2021.

So, what’s the driving force behind women’s growing involvement? According to a recent survey, having an “inspirer,” such as a friend, family member, or colleague, to talk to about cryptocurrency can help. More than a third of women who participated said someone they had a personal connection with inspired them to try cryptocurrency investing. And once introduced to the concept, female investors were drawn to the potential for asset growth, with over half saying they saw cryptocurrencies as a way to improve their financial well-being.  The gains in cryptocurrency investments over time seem to demonstrate this could be true. 

In one 2021 example, an emerging cryptocurrency in Solana (SOL) rose more than 11,000%, while more established cryptocurrencies like Bitcoin and Ethereum outperformed traditional investments like stocks with gains of nearly 60% and 400%, respectively. The volatility, however, is among the reasons many investors have remained cautious. For instance, at the beginning of January 2020, Bitcoin’s price hovered around $7,000, which more than doubled by the end of the year. In November 2021, it reached a high of nearly $69,000 before seeing another bout of volatility into 2022 as it traded between $30,000 and $45,000. 

Still, if you’d bought one Bitcoin just five years ago, when its price was around $1,000, it would have returned 40x your investment. Of course, past performance is no guarantee of future returns, but high consumer inflation may push more investors into evaluating certain cryptocurrencies more seriously as an asset class given many currencies have a fixed supply.

In fact, crypto assets have attracted institutional and retail investors alike, with approximately $30 billion in net new investments last year. And women are a growing piece of that pie. A recent survey showed about one-third of women are planning to buy cryptocurrencies in 2022.

Female Leaders Are Building a More Inclusive Crypto Industry

Some women are still put off by what they perceive cryptocurrencies to represent, and that is a boy’s club of fast trading and increased risk. However, a growing number of women thought leaders in the space are working to change that perception. 

For instance, Kinjal Shah is a senior associate at Blockchain Capital who is working with programmers, developers, and finance professionals to create a more inclusive cryptocurrency ecosystem. Julia Rosenberg founded Orca Protocol, a cryptocurrency company, and is actively recruiting women for key positions at her company.  Eléonore Blanc is the founder of a platform offering education, business, and marketing consulting services for the cryptocurrency industry. And Olayinka Odeniran founded the Black Women Blockchain Council, and has since partnered with ConsenSys to train about 500,000 black women to become blockchain developers by 2030. 

That’s just a small sampling of the impact women are having on the crypto world. CryptoWeekly’s annual Female50 features the most influential women, such as founders, entrepreneurs, scientists, academics, investors, and journalists, all making waves in the growing field of cryptocurrency. These women and many others like them are working to build a crypto industry that actively welcomes women through training, educational and network efforts.

The Future of Crypto Is for All

At Domain Money, we boast female representation in management and throughout the organization that is multiples of the industry average. Work still needs to be done across the industry to bring more individuals into the fold. 

Many banks and brokerage firms facilitate crypto investments, and a growing network of crypto exchanges makes trading more secure to help attract more individuals into the sector. You can invest in cryptocurrencies via professionally managed funds that blend crypto assets with more traditional assets, like stocks and bonds. 

For example, Domain Money offers different investment portfolios based on risk appetite. Domain offers portfolios that range from 100% crypto and incorporate strategies that include stocks. Domain also just launched a portfolio that aims to invest in the companies and cryptocurrencies facilitating the Metaverse. 

Domain Money Advisors, LLC is providing this information for informational purposes only. While Domain Money Advisors, LLC believes that the information contained herein is reliable and derived from reliable sources, it makes no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information. Domain Money Advisors, LLC, and its parent company, Domain Money, Inc., expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed. The information contained herein is not, and shall not constitute an offer to sell, a solicitation of an offer to buy or an offer to purchase any securities or cryptocurrency, nor should it be deemed to be an offer, or a solicitation of an offer, to purchase or sell any investment product or service.  Investing comes with inherent risks and you should always invest within your means and risk tolerance.  Past performance is not an indication of future returns and you should always consult a financial advisor prior to making investment decisions. Please see important disclosures at https://domainmoney.com/legal