The world has witnessed a staggering 95% increase in the population of crypto millionaires over the past year. According to a report from New World Wealth and Henley & Partners, there are now 172,300 individuals worldwide who hold more than $1 million in crypto assets. This significant surge marks a substantial growth from the 88,200 crypto millionaires reported the previous year. Among these individuals, the number of pure bitcoin millionaires has more than doubled, reaching 85,400. Furthermore, the report highlights the presence of 325 crypto centimillionaires, who hold $100 million or more in crypto assets, along with 28 crypto billionaires. It is evident that the crypto rich have ascended the wealth ladder, indicating a broadening landscape of wealth within the crypto sphere.
The Impact of Bitcoin ETFs and Institutional Participation
The exponential growth in the number of crypto millionaires can be attributed to the rapid expansion of bitcoin exchange-traded funds (ETFs), which have amassed over $50 billion in assets since their inception in January. This surge of institutional participation has played a pivotal role in propelling the price of bitcoin by 45% this year, reaching around $64,000. As the value of other crypto assets has also surged, the total market cap of crypto assets has surged to $2.3 trillion, up from $1.2 trillion the previous summer. Notably, five out of the six new crypto billionaires minted over the past year owe their newfound wealth to bitcoin, underscoring its dominance in attracting long-term investors who acquire substantial holdings.
Forbes reports that Changpeng Zhao, the founder and former CEO of Binance, retains the top position as the wealthiest crypto billionaire for the third consecutive year, boasting an estimated net worth of $33 billion. In second place is Brian Armstrong, the co-founder of Coinbase, with an estimated net worth of $11 billion. Following closely are Giancarlo Devasini, the chief financial officer of Tether, and Michael Saylor, the co-founder of MicroStrategy. This elite group of crypto billionaires exemplifies the immense wealth creation potential within the crypto space.
While some crypto assets may still be below their 2021 highs, the recent resurgence of bitcoin has essentially completed a three-year round trip to those levels. Despite this volatility, the growing acceptance of crypto assets by major asset managers like BlackRock and Fidelity, aided by the extensive distribution network of Morgan Stanley brokers, could usher in further wealth creation among large crypto holders. The prospect of crypto not only minting more millionaires and billionaires but also reshaping where the wealthy choose to reside and conduct business is an intriguing development. Many of the newly affluent individuals in the crypto space are exploring relocation to tax-friendly and crypto-friendly jurisdictions, as revealed by Henley & Partners. This trend underscores the significance of creating a conducive environment for crypto entrepreneurs and investors to thrive.
The Shift Towards Crypto-Friendly Jurisdictions
The appeal of tax-friendly and crypto-friendly jurisdictions to the crypto wealthy is underscored by a notable uptick in demand for alternative residence and citizenship options. Henley & Partners’ head of private clients, Dominic Volek, highlights this trend, emphasizing the importance of catering to the needs of this growing demographic. To assist these crypto nomads, Henley has devised a “Crypto Adoption Index” that rates countries based on their tax and regulatory stance towards crypto. Singapore emerges as the top-ranked country on the index, thanks to its supportive banking system, robust investment climate, comprehensive regulations such as the Payment Services Act, regulatory sandboxes, and alignment with global standards. Following Singapore are Hong Kong, the United Arab Emirates, and the United States, reflecting the changing landscape of crypto wealth migration on a global scale.
The surge in crypto millionaires and billionaires underscores the growing influence of digital assets in reshaping traditional wealth paradigms. As the crypto market continues to evolve and attract institutional players, the prospects for further wealth creation and geographic mobility among the crypto elite appear promising. The emergence of crypto-friendly jurisdictions and the adoption of regulatory frameworks conducive to crypto innovation are pivotal factors in fostering a thriving ecosystem for the future generation of crypto entrepreneurs and investors.