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Dominic Volek, CA(SA), FIMC, is Group Head of Private Clients at Henley & Partners and a member of the Executive Committee.
The cryptocurrency landscape of 2024 bears little resemblance to its predecessors. Bitcoin’s rise to over USD 73,000 in March set a new all-time high, while the long-awaited approval of spot Bitcoin and Ethereum ETFs in the USA unleashed a torrent of institutional capital.
Anticipation now builds for potential Solana ETFs joining the Wall Street party. These milestones have seeded a new era of crypto adoption, one where digital assets increasingly cross-pollinate with traditional finance and global mobility.
As cryptocurrencies cement their place in the financial zeitgeist, a new class of high-net-worth individuals has emerged. New World Wealth data paints a striking picture: crypto millionaires surged by 95% in just one year, with 172,300 individuals now holding over USD 1 million in digital assets. The echelons of crypto wealth have expanded dramatically, with centi-millionaires growing by 79% to 325, and even the rarefied air of crypto billionaires seeing a 27% increase to 28 individuals.
This explosive growth has not gone unnoticed by the investment migration industry. At Henley & Partners, we’ve seen a significant uptick in crypto-wealthy clients seeking alternative residence and citizenship options. These digital nomads aren’t just chasing tax optimization; they're in pursuit of jurisdictions that embrace innovation and offer regulatory environments conducive to their decentralized aspirations.
Notably, some of the most attractive locations for those involved in cryptocurrencies are countries that offer residence and citizenship by investment programs, enabling them to obtain the right to reside and/or citizenship in return for making a significant investment.
To make sense of this changing crypto landscape, Henley & Partners has unveiled its second annual Crypto Adoption Index. This comprehensive tool evaluates investment migration programs through the lens of the crypto investor, considering factors such as public adoption, infrastructure, innovation and technology, regulatory environment, economic factors, and tax-friendliness.
The 2024 index has been refined to provide a more nuanced, crypto-focused evaluation of global jurisdictions. These enhancements result in a more precise tool that better serves the needs of discerning investors in the fast-paced digital asset space.
The index reveals a nuanced global picture. Singapore leads the pack, with a #1 ranking across infrastructure adoption, innovation and technology, and regulatory environment. Hong Kong (SAR China) follows closely, buoyed by its robust economic factors and tax-friendly policies. The UAE rounds out the top three, offering unparalleled tax benefits and a burgeoning economy.
Asia Pacific emerges as a powerhouse for crypto-friendly investment migration. Singapore's top ranking is underscored by its recent regulatory framework for stablecoins, positioning it as a forward-thinking financial hub. Hong Kong's approval of spot crypto ETFs in January 2024, which are also becoming available in Singapore, highlights a commitment to remaining competitive in the digital asset space. These examples illustrate the region's proactive approach to integrating digital assets with traditional finance.
The Middle East, particularly the UAE, continues to attract crypto wealth with its zero capital gains tax and progressive regulations. Dubai's long history of crypto-friendliness, including the approval of the first cryptocurrency fund in the Middle East in 2021, further solidifies its position as a leading destination for crypto investors. More recently, Dubai's allowance for residents to trade cryptocurrencies directly with their bank accounts is indicative of a significant step towards mainstream adoption.
Europe also presents a dynamic landscape for crypto investment. Malta and Cyprus offer robust programs tailored for crypto investors, with their progressive regulatory frameworks and innovative approaches to digital assets. Switzerland continues to shine with its “Crypto Valley” in Zug, known for its favorable stance on digital assets and thriving blockchain ecosystem.
The Americas show potential for leadership. The USA has seen a surge of interest following the approval of spot Bitcoin ETFs, while countries like Panama are positioning themselves as crypto-friendly havens in the region.
Caribbean nations, long popular for investment migration, are adapting to the crypto wave. Antigua and Barbuda and St. Kitts and Nevis have both implemented forward-thinking legislation to attract digital asset entrepreneurs.
In contrast, India presents a more challenging environment for crypto investors. The country's stringent crypto tax policies, including a 1% tax-deducted-at-source (TDS) on cryptocurrency transactions and a flat 30% tax on crypto gains, have driven many wealthy individuals to seek alternative residence and citizenship options. This growing interest underscores the desire of India's crypto-wealthy to find jurisdictions with more favorable conditions for optimizing their digital asset investments.
As the lines between traditional and digital finance continue to blur, the synergy between investment migration and cryptocurrencies grows stronger. The Henley Crypto Adoption Index 2024 serves as an important tool, offering insights into jurisdictions that not only welcome crypto wealth but also provide the regulatory frameworks and infrastructure to support its growth.
The crypto millionaires of 2024 are not content with digital riches alone; they seek the freedom of global mobility to match their borderless assets. As nations compete to attract this new wave of digital wealth, we can expect investment migration programs to evolve, catering to the unique needs of the crypto elite.
In this digital gold rush, the most successful jurisdictions will be those that can offer a holistic ecosystem for crypto investors — combining favorable regulations, robust infrastructure, and pathways to alternative citizenship or residence. As we move forward, the intersection of cryptocurrency and investment migration will undoubtedly play a major role in shaping the future of global wealth and mobility.
Henley & Partners assists international clients in obtaining residence and citizenship under the respective programs. Contact us to arrange an initial private consultation.
