The Rise of Crypto Millionaires and Billionaires

The Rise of Crypto Millionaires and Billionaires

In a recent report by New World Wealth and Henley & Partners, it was revealed that the population of crypto millionaires in the world has surged by 95% over the past year. This significant increase is largely attributed to the rise in bitcoin exchange-traded funds and the overall growth of crypto assets in the market. The report indicates that there are now approximately 172,300 individuals worldwide holding more than $1 million in crypto assets, which is a stark increase from the 88,200 reported last year. Additionally, the number of pure bitcoin millionaires has more than doubled, reaching 85,400. The wealth ladder of crypto investors has elevated significantly, with 325 individuals classified as crypto centimillionaires (those with $100 million or more in crypto holdings) and 28 recognized as crypto billionaires.

The Influence of Bitcoin on Wealth Creation

One of the key drivers behind the surge in crypto wealth is the rapid growth of bitcoin ETFs, which have amassed over $50 billion in assets since their launch in January. This has triggered a wave of institutional participation in the crypto market, leading to an increase in the price of bitcoin by 45% this year, with it currently standing at approximately $64,000. The market cap of crypto assets has also seen a substantial rise, reaching $2.3 trillion, up from $1.2 trillion last summer.

According to the report, the majority of the six new crypto billionaires created over the past year have accumulated their wealth through bitcoin investments, showcasing its dominant position in attracting long-term investors with substantial holdings. One notable figure is Changpeng Zhao, the founder of Binance, who is recognized as the richest crypto billionaire for the third consecutive year. With an estimated net worth of $33 billion, Zhao’s wealth has surged by over $10.5 billion in the past year, despite facing U.S. money laundering charges in November.

While many crypto assets are still below their 2021 highs, the increasing acceptance of crypto assets by major asset managers like BlackRock and Fidelity could lead to further wealth creation among large crypto holders. The involvement of Morgan Stanley’s salesforce of 15,000 brokers in promoting crypto investments is also expected to contribute to this trend. Moreover, the report suggests that crypto wealth is not only creating more millionaires and billionaires but also influencing where the affluent choose to reside and conduct business.

As more individuals amass cryptocurrency wealth, there is a growing interest among the crypto-rich to relocate to tax-friendly and crypto-friendly jurisdictions. Many of these newly affluent individuals are seeking alternative residence and citizenship options to optimize their financial portfolios. According to Dominic Volek, head of private clients at Henley & Partners, there has been a notable uptick in crypto-wealthy clients exploring opportunities in such jurisdictions. To cater to this demand, Henley has developed a “Crypto Adoption Index” to rank countries based on their tax and regulatory frameworks for crypto. Singapore has emerged as the top-ranked country on the index due to its supportive banking system, regulatory sandboxes, and alignment with global standards. Hong Kong, the United Arab Emirates, and the United States follow closely behind in the rankings.

The rise of crypto millionaires and billionaires reflects the burgeoning influence of digital assets in the global financial landscape. As institutional adoption grows and regulatory frameworks evolve, the crypto wealth phenomenon is expected to continue reshaping traditional notions of wealth creation and financial mobility.

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