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How the cryptocurrency gender ratio is affecting the market

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Is gender disparity affecting cryptocurrency prices? Yes, and probably more clearly than you think.

OPINION: Cryptocurrency, much like technology and finance in general, has a reputation as a male-dominated space.

That’s because it is. A 2013 survey found that 96% of bitcoin users were male. This hasn't changed much, with most surveys from 2016 and 2017 suggesting that bitcoin users were about 85% to 90% male.

Even Spendher app, which is specifically aimed at getting women involved with bitcoin, may have about 33% male users according to its creator, Skye Dunworth.

This disparity has been well-documented elsewhere, with publications focused on how to make cryptocurrency more inclusive and the ethical implications of this disparity. But there's a bigger question: is that gender disparity affecting cryptocurrency market movements?

Is gender disparity affecting prices?

It's been fairly well demonstrated across many studies that an enormous gender disparity tends to affect decision-making in any community. There’s also a wide body of research showing that on average men and women have significantly different investment habits.

One study, in its preliminary survey of participants, scored participants across several categories based on their responses to hypothetical coin flip questions, and examined responses by gender.

Both genders leaned towards the mathematically sensible option, but women were around twice as likely to accept a statistically lower payout as the cost of guaranteed returns.

Conversely, men were slightly more likely to accept a statistically lower payout as the cost for a chance at higher returns.

Would you rather...

Source: Team Gender Diversity and Investment Decision Making

This kind of study has been replicated many times.

On one occasion researchers set up a theoretical stock market program, which played real market patterns of previous years in high speed. Study participants then played the market, and were give real money and the chance of keeping anything they earned.

Here, even when people were gambling with money they were given freely and the faced with the possibility of real gains, women on average played it measurably safer. They also enjoyed higher average returns than the men.

In a nutshell, the evidence says men are happier with risk than women.

However, there’s no baseline for what cryptocurrency "should" be like. It has been male-dominated for the entirety of its brief history. While there are plenty of factors in play, it’s seems reasonable to assume that the intense volatility and sharp price rises that characterise crypto are at least partly attributable to the market’s gender disparity.

How much of a difference is it actually making?

Based on this, it’s a statistically reasonable assumption that traders in the cryptocurrency market are on average much keener on risk than investors in other markets, and the population as a whole. This would be an expected effect of the gender disparity, alongside the natural tendency for novel and unfamiliar forms of trading to draw a slightly riskier crowd than more conventional approaches.

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"As a male aged 18 to 25 this roulette-themed flaming tiger juggling ICO is really speaking to me."

The actual difference this makes is harder to quantify though.

In practical terms, you could assume that this risk-happiness takes the form of average cryptocurrency traders putting down a larger portion of their savings on crypto than investors in other areas, along with a greater willingness to lose it all.

How much more? It’s hard to say, but existing research appears to suggest that the average difference in risk preferences between men and women is, by a conservative estimate, enough to change the outcome of decisions up to about 20% expected return on investment.

So we could reasonably assume that gender disparity in cryptocurrency is responsible for:

  • Adding tens of millions of dollars to the market which wouldn’t be there otherwise
  • Substantial funding for ventures whose risks would have otherwise made them unpalatable.

And that's gender alone. Another factor that would have an influence well known age-related propensity for risk and the young-skewing age of the average cryptocurrency user.

What about other male-dominated investment types?

Other existing research suggests that cryptocurrency is likely to act a bit differently to other male-heavy markets.

The attenuating effect of knowledge

The difference in risk-happiness between men and women shrinks considerably (but doesn’t disappear entirely) when you measure investment behaviours between equally informed and experienced participants.

Basically, men are generally happier to take more investment risks even when they’re not terribly well-informed. Women are generally happy to make the same decisions, but usually only once they’re fully informed and judge it to be a safe risk.

This poses a problem for cryptocurrency. There’s no such thing as an accredited cryptocurrency financial adviser. Cryptos are notoriously volatile, there are no shortage of competing opinions and coin value just doesn’t always follow the path of common sense.

Measurably thresholds of gender disparity

You don’t need to reach a neat 50/50 gender split to achieve “normal” levels of risk-taking behaviour among crypto traders. The impact of gender on decision-making in groups is different to the individual differences between the average male and female investor. Somewhere in the 40/60 to 30/70 range typically lands you in balanced decision-making territory.

However, cryptocurrency has yet to hit that. The gradual increase of women in cryptocurrency from around 5% to about 10-15% will likely not have made a measurable difference to risk tolerance.

This ratio rule is mostly applicable to group decision-making behaviour rather than individual investment preferences. That said, you can’t really ignore the influence of groupthink in cryptocurrency.

Following the herd

The migratory patterns of the wandering crypto speculator will often take enormous herds from coin to coin. And when the vast majority of the herd has a distinct taste for high-risk pastures, they’ll tend to take along the more risk-averse members too.

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HODL for spring foliage and keep walking uphill to get closer to the moon.

The herd votes with their dollars, which has the effect of dragging the entire population towards riskier projects and investments, and making riskier projects a magnet for big funding.

What does this investment trend look like?

One effect of gender disparity in crypto is the amount of money being poured into it.

Another is the tendency to make what might be seen as "unreasonably high risk" investments.

Consider the now ubiquitous initial coin offering (ICO). An ICO is when someone pitches a big idea, ideally accompanied by a whitepaper, and asks for a few million (or hundred million) dollars to see it on its way.

In the second half of 2017, ICOs raised about US$800 million. By contrast only about US$235 million was raised through venture capital funding in the same period. This difference is especially stark when you consider the relatively small pool of cryptocurrency users compared with fiat currency users.


UET stands for Useless Ethereum Token. It’s an ERC20-compatible token created on the Ethereum blockchain. It can be sent to other wallet addresses on the Ethereum blockchain, and is otherwise completely useless. So functionally it’s exactly like bitcoin, except with cheaper and faster transfers.

In its ICO the coin’s creator promised that the UET token would do nothing, accomplish nothing and be completely worthless. He was right about the first two, but wrong on the third count. The ICO raised over US$250,000, plus 310.5 ETH, today worth well over half a million dollars all up. After the ICO ended people kept buying UET, often paying the equivalent of thousands of dollars for it. UET’s price briefly topped US$20 per token.

The average return on an investment from ICOs isn’t so crash hot.

From June to September 2017, about 53% of ICOs hit at least 75% of their funding goals, typically raising tens of millions of dollars each. Even those that failed still mostly ended up with multimillion dollar sums. More than half of all ICOs are pulling in millions of dollars, with some pushing well over $100 million.

But against that backdrop, it’s speculated that around 99% of new cryptocurrencies will fail.

ICO buy-ins are one of the highest-risk but highest-return investments in the world, not only in pure financial terms, but also because they take place in a largely unregulated environment and can even be outright scams. And yet they’re pulling in unprecedented amounts of funding.

It’s almost as if cryptocurrency investors are, for some reason, disproportionately willing to throw large amounts of money at dubious, risky projects.

For better or worse, the composition of the cryptocurrency market determines which ICOs get off the ground and which are more likely to sink without a trace.

Not just the prices

In the longer run, the skewed gender make-up of cryptocurrency investors affects more than prices. A decentralised community-oriented cryptocurrency will tilt in the direction of its community which can end up changing the entire path of a coin, and even how useful it is.

For example, the ARK cryptocurrency calls on its users to vote in 51 node operators at a time. These operators control the network, profit from managing it and get to exercise some decision-making power. Not surprisingly they’re overwhelmingly male. This will inevitably affect the direction of ARK’s development in the future.


Augur is a predictions platform. It lets people make predictions and essentially bet on the outcome. The payout of their bet is based on the current likelihood of each outcome, according to previous voters. The end result is a system that has been found to outperform experts in a diverse range of areas.

It’s reasonable to assume that its user base is skewed towards younger, male punters than the general population, and that greater diversity would help it more accurately predict a wider range of events.

What, if anything, should be done?

Is male domination affecting the cryyptocurrence market and influencing prices? Absolutely. It seems clear that what we’ve come to consider as normal on the cryptocurrency market is clearly, but not entirely, related to its gender disparity.

Is that a bad thing? Ehhh... probably.

Firstly, you’ll tend to find that groups with a more diverse range of decision-makers tend to achieve more optimal outcomes.

A more balanced gender make-up might take the form of:

  • A bit more discernment around ICO investment, leading to a higher overall quality of ICOs and new currencies.
  • More stable prices, helping cryptocurrencies get that much closer to widespread adoption and more quickly bringing the benefits of the blockchain to more applications.

Plus, cryptocurrency might be one of the biggest wealth migrations the world is going to see for a very long time and there’s definitely something to be said for fairness in that context.

But solving the problem isn't easy. Finance and tech in general are very male-dominated areas. And cryptocurrency is actually slightly ahead of the game compared to laggards like the hedge fund industry (currently sporting about 9 men for every woman).

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"Short the gender equality futures, go long on stock photos."

Addressing these potential issues will probably need to take place across two fronts: cryptocurrency and the broader finance industry.

Some services are emerging specifically to address this, such as the Spendher app which aims to help women get more involved in investment in general, specifically using cryptocurrency as an entry point.

"I think the finance industry has traditionally spoken in a man’s language, and presented finances and investments in an unnecessarily intimidating way," says the app creator Skye Dunworth. "70% of women don’t invest, and 75% feel misunderstood by the finance industry. That’s not good enough."

It’s hard to disagree when you look at cryptocurrency (or any other) futures trading, and the often unnecessary bulls ‘n bears terminology its inhabitants enjoy swinging around.

But there’s also the question of bridging innate differences in risk preference between genders. There’s no doubt that well-managed investments are money-makers, and an increasingly essential part of life and retirement.

"At school, we’d basically get told how to save and that’s it," Dunworth says. "[But] I feel like understanding how to invest is as important as using your computer."

"One of the major reasons we’re not investors is risk. Females feel that we have to be experts on a particular thing in order to invest in something, whereas a man would be more likely to try something without being more familiar with it."

"When I started investing, I realised that it’s pretty simple to understand. It was like debunking all these myths."

The research on typical investment preferences by gender definitely backs this up.

But what’s the key to getting more gender equality in investment and cryptocurrency? It might be to just go for it.

"My theory is, invest that money you would spend on something you don’t need and you’re not risking anything.” Dunworth says. "That’s how I quantify no risk."

And hey, there’s no time like the present - especially in the disproportionately volatile world of cryptocurrency.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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