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After the Bell: Maybe, just maybe, they were right about Bitcoin

After the Bell: Maybe, just maybe, they were right about Bitcoin
Georgina Crouth
By Georgina Crouth
29 Aug 2024
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Henley & Partners’ new Crypto Wealth Report shows an astounding number of people worldwide now hold more than $1-million in crypto assets.

It seems almost self-evident that taking advice from an A-list celebrity — any advice — ultimately means things are going to turn out very badly for you. 

Off the top of my head, here’s a list of celebs that one should never, ever, not in a million years, listen to or emulate: 

J-Lo, Ben Affleck, Amy Winehouse, Elizabeth Taylor and Richard Burton for relationship advice and why it’s a good idea to get back together with your ex. 

Mickey Rourke, Jocelyn Wildenstein and Kim Kardashian on why more is more when it comes to plastic surgery.

Robert Downey Jr, Demi Lovato, Ben Affleck, Elvis Presley, Nigella Lawson and most of Hollywood about why daily nose candy is a wholesome life choice.

Arnold Schwarzenegger, Kim Kardashain, Joe Rogan and Victoria Beckham for diet advice.

But if you’d listened to Elon Musk, Jack Dorsey, Mike Tyson, Maisie Williams, Tom Brady and Snoop Dogg about crypto, especially Bitcoin, you could — hypothetically — be sitting in the pound seats.

This is no weak attempt at investment advice, although Henley & Partners’ Crypto Wealth Report 2024 certainly gives one pause for thought. 

The newly released report reveals that the number of people worldwide holding more than $1-million in crypto assets has skyrocketed by 95% to 172,300 — in a year. 

Dramatic surge


Bitcoin millionaires, in particular, have seen a dramatic surge of 111%, now reaching 85,400.

The total market value of crypto assets has now reached $2.3-trillion, which is an 89% increase when compared with last year’s $1.2-trillion, as reported in Henley’s inaugural report in 2023. 

The ranks of the ultra-wealthy in the crypto world have also exploded, with the number of crypto centi-millionaires (those whose assets exceed $100-million), surging by 79% to 325. 

The pick of the litter, the numbers of crypto billionaires, has also exploded, with a 27% increase to 28 members globally.

Where do these crypto bros live? I haven’t the faintest, but my guess is a few are ensconced in Misty Cliffs or Scarborough. 

What we do know is that some countries are more crypto-friendly than others, by hosting investment migration programmes based on their level of adoption and integration of cryptocurrencies and blockchain technology, Henley tells us. 

There are 23 countries in Henley’s Crypto Adoption Index 2024, selected for their progressive support for a crypto environment and level of crypto-friendliness. Singapore retains its position as this year’s leading cryptocurrency hub, securing the top spot in the index with a score of 45.7 out of 60. Its strengths lie in technological innovation, robust regulations and well-developed infrastructure. 

Hong Kong is a close second, benefiting from a strong economy and investor-friendly tax policies. The UAE is in third position, offering significant tax advantages and a rapidly growing digital economy. 

None of these top three countries impose capital gains tax, making them attractive destinations for crypto investors and high-net-worth individuals.

Watershed moment


Jean-Marie Mognetti, the CEO and co-founder of CoinShares, writes in his contribution to the report that 2024 is a watershed moment for the cryptocurrency industry because the US Securities and Exchange Commission (SEC) has given the green light to spot Bitcoin Exchange-Traded Funds (ETFs) — an investment that exposes ordinary investors to the price moves of Bitcoin. This decision, he says, signifies the maturation of Bitcoin as a mainstream investment asset, suitable for inclusion in traditional portfolios. 

As such, it’s more than just regulatory approval; it’s a testament to Bitcoin’s evolution as a legitimate financial instrument.

The SEC’s move is expected to catalyse a new era of mainstream acceptance and integration of cryptocurrencies into the global financial system, Mognetti argues: The traditional 60% equities and 40% bonds portfolio might be a balanced investment strategy, but it can be improved by adding Bitcoin. 

“Bitcoin’s impressive historical returns have the potential to boost portfolio performance significantly. Over the past decade, Bitcoin has averaged an annualised return of approximately 200%, vastly outperforming traditional assets such as stocks and bonds. 

“Despite its volatility, Bitcoin has demonstrated a remarkable long-term upward trajectory, driven by increasing adoption, limited supply, and growing recognition as a store of value. By allocating a small percentage of a portfolio to Bitcoin, investors can capture some of these growth prospects without substantially increasing risk.”

Shift in wealth-creation paradigms


Blockchain intelligence company Hoptrail’s CEO, Henry Burrows, in his analysis says there’s been a shift in wealth-creation paradigms. “Among previous generations, by and large wealth derived from property and stocks. But today, it stems from Bitcoin, Ethereum, NFTs, initial coin offerings, mining, yield farming, and staking. And in many cases, staggering returns are made from relatively small amounts of initial capital.”

Many of us might be partial to taking advice from one of the world’s most famous and wisest investors, Warren Buffett, who warned: “Stay away from it. It’s a mirage, basically. In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending.” 

Before his own ending, Charlie Munger, Berkshire Hathaway’s co-founder, sagely likened cryptocurrency arbitrage to “trading in turds”, saying he doesn’t welcome a currency that’s “useful to kidnappers and extortionists, and so forth”.

But even Warren Buffett’s Whisperer and the Oracle of Omaha himself — who has similarly branded crypto as “rat poison squared” – could be wrong. DM

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