A recent report suggests that, in spite of the fact that high net worth individuals (HNWIs)are growing more wealthy all the time, these investors are not yet taking part in the cryptocurrency market to the same degree as other demographics. The recent Capgemini World Wealth Report 2018 suggests that one of the reasons for this hesitation to adopt one of the trendiest new investment areas in the financial world may have to do with the wealth management industry.
29% Have 'High Interest'
The report, cited by Bitcoinist, suggests that 29% of millionaires have a “high degree of interest” in entering the cryptocurrency space as investorswhile another 27% “sit on the fence.” Altogether, then, a full 56% of HNWIs are either prepared to invest in digital currencies now or could likely be swayed to do so in the near future. Some 44% of HNWIs have expressed a lack of interest in the space.
Given the breakdown above, one might expect that a relatively large proportion of millionaires would be active as cryptocurrency investors. However, only about a third of the more than 2,600millionaires included in the study have received information about investing in cryptocurrencies from their wealth managers.
Caution: Necessary or Overblown?
Wealth managers may still be largely cautious about the long-term health of the digital currency space, or perhaps they lag behind individual investors when it comes to their understanding of cryptocurrencies and their potential. While the traditional financial world has remained broadly hesitant when it comes to digital currencies, there have been some signs that mainstream investors and some financial institutions are warming up to the concept, or at least to the blockchain technology that supports the cryptocurrency space.
Wealth management firms are typically focused on traditional and institutional investing practices, meaning that they are less likely to be at the vanguard of cryptocurrency investment opportunities. Nonetheless, Capgemini believes that a shift may be approaching: The report suggests that “the strong demand for information on cryptocurrencies from younger HNWIs is likely to force wealth management firms to at least develop and offer a point of view during the months ahead.”
The report also indicates that investment returns for HNWIs are above 20% as of last year, marking the second year in a row that this demographic has grown substantially wealthier.
Investing incryptocurrenciesand Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation byInvestopediaor the writer to invest in cryptocurrenciesor ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions.Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.
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FAQs
Do Millionaires Invest in Bitcoin? Several wealthy individuals make no effort to hide their bitcoin holdings, and it's likely that many more millionaires and billionaires invest in the cryptocurrency without advertising it.
How to legally avoid crypto taxes? ›
9 Ways to Legally Avoid Paying Crypto Taxes
- Buy Items on BitDials.
- Invest Using an IRA.
- Have a Long-Term Investment Horizon.
- Gift Crypto to Family Members.
- Relocate to a Different Country.
- Donate Crypto to Charity.
- Offset Gains with Appropriate Losses.
- Sell Crypto During Low-Income Periods.
In an inaugural Crypto Wealth Report, Henley & Partners sheds light on this intriguing subject, revealing that there are currently 88,200 crypto millionaires globally. Who are they, and what assets do they prefer? This article delves into the prospects, challenges, and realities of crypto millionaires.
Why shouldn't you invest in crypto? ›
Investments in crypto can be complex, making it difficult to understand the risks associated with the investment. While not all cryptos are same, they all pose high risks and are speculative as an investment. You should never invest money into crypto that you can't afford to lose.
What crypto are billionaires buying? ›
Billionaires, just like the smallest retail investors, are looking for ways to boost their allocations to Bitcoin.
How much crypto do you need to be a millionaire? ›
So, 10 times from those levels would mean that Bitcoin could go as high as $350,000, Saylor said. If this is the case, you would need to own 2.86 BTC to become a millionaire. It would cost around $190,000 today.
Should I cash out crypto? ›
Reasons for cashing out crypto or Bitcoin
The decision to cash out crypto or Bitcoin depends on your financial goals and market conditions. You may want to lock in gains, cut or harvest losses for taxes, or simply use your digital assets in the real world. It's crucial to consider tax implications and market timing.
Do you pay taxes on crypto if you don't cash out? ›
As long as you hold digital assets you purchased with fiat currency without converting them into cash or other crypto, you are not required to report or pay taxes on any potential gains to the IRS.
What states are tax free for crypto? ›
However, there is no tax for simply owning cryptocurrency. What states have no crypto tax? Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income taxes (although New Hampshire and Tennessee tax interest and dividends while Washington taxes capital gains).
Does Warren Buffett own Bitcoin? ›
Warren Buffett Doesn't Own Bitcoin, but His Company Is Betting $1 Billion on This Crypto Stock. Warren Buffett has made his dislike for Bitcoin known over the years.
Yes, it is possible for someone to become wealthy by investing or trading in cryptocurrencies. Consider seeking advice from financial professionals or experienced traders before diving into cryptocurrency investments or trading.
Where do crypto millionaires move to? ›
Bitcoin millionaires are moving to Puerto Rico for lower taxes and island living. Bitcoin enthusiasts are flocking to Puerto Rico, thanks to tax breaks and an island lifestyle. As the community grows, it's attracting more newcomers from the states as well as curious locals.
Has anyone got rich from cryptocurrency? ›
How Many Billionaires Own Crypto? There are 16 cryptocurrency billionaires in Forbes' ranking of billionaires.
Can I get rich using crypto? ›
Can crypto make you rich? Crypto is a high-risk, high-return asset class. This means that it's possible to generate life-changing gains with crypto, but that many crypto projects have also failed.
Is crypto a good way to build wealth? ›
A decentralized cryptocurrency, Bitcoin (BTC) has outpaced traditional venues for putting your savings like stocks, gold or real estate. If you are asking: Is crypto a good way to build wealth, the answer is affirmative.
Who is the richest person in cryptocurrency? ›
- 1) Satoshi Nakamoto ($76.67 billion) The king of kings of cryptocurrencies. ...
- 2) Changpeng Zhao ($47.7 billion) ...
- 3) Brian Armstrong ($11.5 billion) ...
- 5) Anonymous Bitcoin Whale#1($6.59 billion) ...
- 6) Mt. ...
- 7) Michael Saylor ($5 billion) ...
- 13) Fred Ehrsam ($3.2 billion) ...
- 14) Chris Larsen ($3.2 billion)
