By Anthony Conwright

January 4, 2023

It’s a veritable iron law of investing: When an asset bubble collapses, the ensuing fallout shows that financial markets are anything but race neutral. As bubbles seek to absorb the last tributaries of liquid cash, Black Americans become, in vastly disproportionate numbers, the last buyers-in—and the last holders of worthless paper after the market insiders bail out. This was the story of the 2008 subprime meltdown, which demolished Black wealth on a ruinous scale, and it’s now the saga of the great collapse in cryptocurrency.

These trends are nothing new. Throughout modern US history, Black Americans have turned to both eccentric and pragmatic avenues of wealth creation to establish economic solvency. When the overvalued markets for such assets undergo the same kind of shakeouts that are now crushing crypto, the predatory nature of racial capitalism reasserts itself with a vengeance, And what’s clearly at the heart of financial business as usual in the United States is an intergenerational regime of anti-Blackness, protected through violence and theft.

Historically, the tactics vary, but the scheme is the same: lure African Americans into the dream of wealth building, then pillage the wealth of unsuspecting Black investors on a still greater scale. The Samuel Dubois Cook Center on Social Equity at Duke University and the Nathalie P. Voorhees Center at the University of Illinois–Chicago published a study calculating the amount of wealth Black families in Chicago accumulated and lost during the 1950s. Researchers found that Black families lost between $3 billion and $4 billion in wealth because of predatory housing contracts. These restrictive agreements compelled Black families to make large down payments for home mortgages and pay monthly installments at high interest rates. The buyer never gained ownership of the property until the contract was paid in full and all its conditions were met. Contract buyers also accumulated no equity in their homes. No laws or regulations protected them.