Getting involved with cryptocurrency is equally about the social aspect as it is about the economics, according to a Morningstar executive.

“People rely on their network of friends, neighbors, aunts and uncle who may have hit it big in cryptocurrency to convince them that maybe there is a project worth engaging with,” said Madeline Hume, senior research analyst at the research firm.

And because the social factor and engagement drive interest and speculation in cryptocurrencies, Hume said women and others get left out of the conversation because it’s typically a network of young white guys in their mid-20s who are talking about crypto.

Hume, who sat on a panel titled, "Why Aren’t More Women Talking About Crypto" at the Morningstar Investment Conference this week, said the cryptocurrency experience is typically inspired by an affiliation with a professional association with computer programming. “A lot of these, even Reddit communities, have stemmed from software programmers that have taken this on as a project,” she said, noting that the demographics of these software coders and programmers “skews male, younger, wealthier and oftentimes, there are fewer minorities represented.”

Women, Hume noted, also are not as engaged with cryptocurrency because they are not as prone to taking risks, “and especially not as prone to taking risks that they don’t understand,” she said. “With cryptocurrency, there is still a lot of unknowns and so you see some of that aversion playing out,” she added, citing the recent collapse of the stablecoin TerraUSD and Luna.

Luna, a popular cryptocurrency linked to TerraUSD, lost 99% of its value last week after Terra, a blockchain platform co-founded by Korean developer Do Kwon, collapsed. The blockchain was temporarily halted after the collapse wiped out about $42 billion. Both coins are worth zero today, Hume noted.

Jasmin Sethi, CEO of Sethi Clarity Advisers and also a panelist, agreed that because of the dominance of crypto male networks, access to information is more difficult for women. But she also added that women may not be too eager to get into crypto. “I do think women are probably smarter and [have] not gotten into this speculative asset class. I am not even sure it’s an asset class,” quipped Sethi, who is associate director of policy research at Morningstar.

The panel also opined on the recent warning from Coinbase that its users could lose all their cryptocurrency stored in their accounts if Coinbase goes bankrupt. Sethi noted that this disclaimer by Coinbase is not new. She said the disclosure came because of the recent accounting guidance on the job of a crypto custodian, issued by the Securities and Exchange Commission.

Sethi said there are ways to self-custody on Coinbase, which means that investors have to take total charge of their account. “You can’t lose your key, you have to keep track of your password and everything, otherwise you will lose it and never be able to access it again if something goes wrong,” she said.

Sethi did note that investors also could use other vehicles like robos to custody their crypto accounts, but the safeguards are not as strong as owning stocks with a broker. “If a broker goes bankrupt, there is a way to transfer your stocks. We don’t have that kind of infrastructure for crypto. So ultimately, you either bear the risk or you take care of it yourself,” she said.

The panelists also discussed the recent announcement by Fidelity that it plans to offer bitcoin as an investment option in its 401(k). Morningstar’s senior vice president of business development, Carla Paxton, who moderated the panel, said although this will allow investors who have most of their money in a 401(k) the opportunity to buy, there are potential pitfalls.

Hume said from an investor’s point of view, it is difficult to find parallels to another asset class in terms of volatility. Fidelity’s allowance of crypto in 401(k) runs up to 20%, and it will be up to plan sponsors whether they accept that maximum upper ceiling or whether they set their own, she said.

“But a 20% allocation of cryptocurrencies in a 401(k) from our view is widely inappropriate,” Hume said. “Once you get above 2%, it can eclipse the majority of your volatility contribution. So, if you have a 60/40 portfolio and a 2% allocation in bitcoin, that’s 50% of your volatility right there.”

Sethi pointed out that the interesting thing about Fidelity’s announcement is that it came shortly after the Department of Labor issued guidance on crypto in 401(k) accounts. “Looking at that guidance, it’s very hard to imagine plan sponsors actually taking Fidelity up on this,” she said. “Time will tell.”