Henley & Partners Publishes the World’s First Crypto Wealth Report
For immediate release: Tuesday, 5 September 2023
There are 88,200 crypto millionaires worldwide, with just under half (40,500) holding their fortunes in Bitcoin, according to the inaugural Crypto Wealth Report published by leading international wealth and investment migration specialists Henley & Partners. The total market value of crypto is now a staggering USD 1,180 billion and there are 425 million individuals globally that own cryptocurrencies.
This first-of-its-kind report includes exclusive statistics on the number of crypto and Bitcoin millionaires, centi-millionaires, and billionaires provided by global wealth intelligence firm New World Wealth, as well as insights from leading academics, industry experts, and crypto players. It also features Henley & Partners’ Crypto Adoption Index, which compares the best residence and citizenship by investment programs for crypto investors.
Dr. Juerg Steffen, CEO of Henley & Partners, says as governments scramble to draft new regulations to adapt to shifts in the world of crypto, traders, miners, investors, and cryptopreneurs are exploring investment migration strategies that can safeguard their interests. “We have seen a significant spike in enquiries from crypto millionaires over the past six months, who are all looking to build a viable ‘Plan B’ to protect themselves against any potential future bans on the trading or use of cryptocurrencies in their countries, and to allay the risks of aggressive fiscal policies that tax digital assets at source.”
To the moon: Crypto is a ‘done deal’
In the global super-rich league, there are now 182 crypto centi-millionaires (namely, high-net-worth individuals (HNWIs) with crypto holdings of USD 100 million or more), 78 of whom are Bitcoiners, while six of the world’s 22 crypto billionaires have amassed their fortunes from trading Bitcoin.
As leading personal finance and investment expert Jeff D. Opdyke points out in the Crypto Wealth Report, “from the moment Bitcoin was born in 2009, crypto was always going to become the most inevitable trade in 30 years. And just like with the early internet hype, there was always going to be a boom and bust. Crypto today, in the wake of a bear market, is a replay of 1999 to 2001 — in other words, a fantastic opportunity to buy when blood stains the streets because we’re not likely to ever see these prices again.”
Dr. Niklas J.R.M. Schmidt, Partner at the Austrian law firm Wolf Theiss, says crypto assets are an exciting new asset class that HNWIs and their family offices need to take cognizance of. “Bitcoin and Ether together have approximately 65.2% market share. By way of comparison, the next three crypto assets have market shares of 7.6%, 2.9%, and 2.5%. Thus, for many investors new to the crypto space it could make sense to limit oneself initially to investments into Bitcoin and Ether, since these are by far the largest players.” And as Research Analyst at 21Shares, Carlos Gonzalez Campo, advises, “although crypto asset valuation remains an emerging topic seeking consensus, especially as the asset class expands and matures, there are some actionable methods investors can use.”
However, Assoc. Prof. Dr. Mete Tevetoğlu, a blockchain law specialist in Istanbul, warns in the report of the “severe legal consequences” of thinking that there are no laws governing blockchain technology and crypto assets. Cyber-security specialist Ali Khan explains, “the leadership of an increasing number of jurisdictions understand the legitimate nature of that wealth and have produced mechanisms for it to be stored securely, with soft infrastructure that renders it treated in the same manner as almost any other tangible or intangible asset class. But there are still a number of jurisdictions that are yet to bite.”
Best investment migration options for crypto investors
Including over 750 data points, within six main parameters comprising 19 sub-parameters and 29 indicators, Henley & Partners’ new Crypto Adoption Index is designed to assess and rate crypto-friendly investment migration host countries based on their level of adoption and integration of cryptocurrencies and blockchain technology. The index relies on a wide range of data sources, including the World Bank and official government statistics, and considers various factors that contribute to a country’s crypto ecosystem, providing a comprehensive overview of the extent to which they are embracing this emerging technology. The six key parameters are public adoption, infrastructure adoption, innovation and technology, regulatory environment, economic factors, and tax-friendliness.
The list of 26 countries was carefully selected based on an assessment of the regulatory, technological, economic, and social elements necessary for the development of the blockchain ecosystem. Each has made significant progress in creating a supportive crypto environment, and all are recognized as displaying a degree of crypto-friendliness.
Dominic Volek, Group Head of Private Clients at Henley & Partners, points out in the report that just as alternative residence and citizenship are fast becoming a highly coveted asset class among wealthy individuals, digital assets are also growing in popularity despite their inherent volatility. “Some of the most attractive locations for those involved in cryptocurrencies are in countries that offer residence and citizenship by investment programs, which enable them to obtain the right to reside and/or citizenship in return for making a significant investment. Cryptocurrencies’ prominence in high-net-worth individuals’ portfolios has also increased as investors seek new sources of return and diversification.”
Singapore leads the pack as top crypto hub
With its innovative ecosystem and supportive community, Singapore takes the leading position in Henley’s Crypto Adoption Index with a score of 50.2 out of 60, or 83.76%. The government cooperates closely with all actors — banks, businesses, and the public — for the optimal development of the national crypto sector, and the city-state’s crypto taxes are beneficial to individuals and investors alike, with no capital gains taxes.
Switzerland sits in 2nd place (78.17%) with its well-established crypto infrastructure, robust legal framework, and reputation for privacy and security, followed closely by the UAE in 3rd place on 76.17%. The UAE stands out as a leading jurisdiction for crypto investors, with its strong public adoption score demonstrating a vibrant interest in the crypto ecosystem. The Middle Eastern powerhouse also offers favorable tax policies and a high level of economic stability. Hong Kong (4th on 76%), the US (5th on 73.83%), Australia (6th on 71.83%), and the UK (7th on 71.17%) all land first-class honors when it comes to crypto adoption, with Australia joining Singapore and Switzerland as frontrunners when it comes to providing a supportive regulatory environment that balances innovation with consumer protection.
Canada (8th on 67.33%), Malta (9th on 64.83%) and Malaysia (10th on 62.5%) all make it into the Top 10 countries hosting the most appealing investment migration program options for crypto investors. As Volek points out, “Malta’s reputation as the “Blockchain Island” has been bolstered by government initiatives to foster innovation, attract blockchain businesses, and provide regulatory clarity, while Malaysia is developing into a promising center for blockchain innovation in the Asian region with its burgeoning crypto community and the emergence of numerous start-ups.”
UAE is one of the most tax-friendly options
In terms of the tax-friendliness parameter, which assesses a country’s approach to taxing cryptocurrency-related activities, Singapore and the UAE score a flawless 10 out of 10 on the Henley Crypto Adoption Index. The firm’s research team examined aspects such as tax rates on crypto transactions, mining, staking rewards, and capital gains. Hong Kong, Mauritius, and Monaco all secure an impressive 9 out of 10 when it comes to tax efficiency, with Antigua and Barbuda, Malaysia, Namibia, and Switzerland each achieving a respectable 8 out of 10.
Switzerland does not charge any taxes on profits from crypto trading or investing. However, the country does have a wealth tax on investments, which is set by each individual canton. In addition, profits from crypto transactions such as mining, staking, and interest are taxed as ordinary income. In the UAE, the Financial Services Regulatory Authority of Abu Dhabi Global Market (FSRA-ADGM) was the first to provide rules and regulations regarding cryptocurrency purchasing and selling. The Emirates are generally very open to new technologies and have proposed zero taxes for crypto owners and businesses.
Spike in crypto adoption among investors and sovereign states
The UAE and Singapore again share the leading position when it comes to public adoption, which measures the level of awareness, interest, and engagement with cryptocurrencies in the general population, with each scoring 7 out of 10 for this parameter. The UK, US, Canada, Australia, Mauritius, Hong Kong, Switzerland, and Malta all make it into the Top 10 when considering factors such as the percentage of crypto users relative to the total population and Google search interest related to cryptocurrencies.
However, when it comes to infrastructure adoption, which assesses the technological foundations for crypto transactions and exchanges, such as the number of crypto ATMs, integration with local banks, and the presence of digital asset exchanges, both the UAE and Singapore tumble down the rankings. The US currently blazes the trail in this regard, with Greece, Thailand, Hong Kong, and New Zealand all making it into the Top 10 countries with a reasonably well-developed infrastructure that supports smoother crypto adoption.
Commenting in the Crypto Wealth Report, Adnan Khan, a crypto specialist at Henley & Partners, insists “cryptocurrencies are the stars of the digital era and have leaped from the internet’s fringes to command center stage in today’s financial theater. These innovative blockchain-backed assets, shimmering with potential, represent the pulse of a modern financial revolution.”
Read the full Crypto Wealth Report online.
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Notes to Editors
About Henley & Partners
Henley & Partners is the global leader in residence and citizenship by investment. Each year, hundreds of wealthy individuals and their advisors rely on our expertise and experience in this area. The firm’s highly qualified professionals work together as one team in over 40 offices worldwide.
The concept of residence and citizenship by investment was created by Henley & Partners in the 1990s. As globalization has expanded, residence and citizenship have become topics of significant interest among the increasing number of internationally mobile entrepreneurs and investors whom we proudly serve every day.
Henley & Partners also runs the world’s leading government advisory practice for investment migration, which has raised more than USD 12 billion in foreign direct investment. Trusted by governments, the firm has been involved in strategic consulting and in the design, set-up, and operation of the world’s most successful residence and citizenship programs.
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