Number of Crypto Millionaires Doubled to 172,300 Over the Last Year, Study Finds

The number of crypto millionaires has doubled in the last year, as key regulatory approvals and a new Bitcoin high led to a rapid increase in crypto adoption and a new “crypto elite,” according to a report by wealth and migration consultancy Henley & Partners.

Crypto adoption increased 31% in the 12 months ending in June, to a total of 560 million users globally, while the total market value of crypto holdings nearly doubled to US$2.3 trillion as of June 30. Bitcoin, which peaked in March at US$73,000, comprised about half of both users and value, with 275 million investors and a US$1.2 trillion total market value, up 103% from the previous year, the report said.

The surge in both price and adoption of cryptocurrencies has minted a new crop of millionaires.

In fact, the number of crypto millionaires just about doubled to 172,300 in the last 12 months, and the number of Bitcoin millionaires more than doubled to 85,400—or roughly half of the overall total.

There are also now 325 crypto centi-millionaires—individuals with crypto holdings of at least US$100 million—up from 181 last year, with Bitcoin investors, once again, comprising about half of the total.

Crypto currencies have also minted 28 billionaires, a list that includes the Winklevoss twins—Brett and Cameron Winklevoss;SecondMarket founder Barry Silbert ; MicroStrategy co-founder Michael Saylor ; and Binance founder Changpeng Zhao , who is currently serving a four-month prison sentence after being found guilty of money laundering by a California court earlier this year, according to MarketWatch.

The increase has largely been driven by regulatory shifts that have allowed for the normalisation of cryptocurrencies, despite the high-profile implosion of key crypto players like FTX and Genesis Global Capital in 2022 and 2023. In particular, the U.S.’s’ approval of spot crypto exchange-traded funds in January (following its approval of crypto futures ETFs) signalled a new era of institutionalisation.

“The long-awaited approval of spot Bitcoin and Ethereum ETFs in the USA unleashed a torrent of institutional capital,” Dominic Volek of Henley & Partners said in the report.

The U.S. ranked fourth in Henley & Partners’ analysis of global crypto hubs, which takes into account regulation, infrastructure adoption, technology prowess, and tax-friendliness, among other factors. Singapore leads the list due to its recent implementation of a regulatory framework for crypto assets, as well as its strength in infrastructure, technology, and economic indicators. Hong Kong, which also approved spot crypto ETFs in January, came second, followed by the United Arab Emirates, which scored highest on tax-friendliness.

Competition between global economic hubs is crucial, because the rise of the crypto elite is driving wealth migration patterns, Henley & Partners said.

“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,” Volek said.

Tuesday’s retail sales report could be the scrap of evidence that tips the balance as Federal Reserve officials decide how much to cut interest rates on Wednesday.

It is practically a given that the central bank will reduce rates. Inflation has fallen to its lowest point since February 2021, giving the Fed more flexibility to focus on the second component of its dual mandate—achieving maximum employment. Although the labor market remains resilient, the most recent two jobs reports have been weaker than expected, putting some pressure on the Fed to loosen monetary policy.

The question now is by how much rates will fall—0.5 percentage point, or 0.25 point? The indications from interest-rate futures are split , recently favoring the more aggressive half-percentage-point decrease.

Andrew Hollenhorst, an economist at Citi , leans toward the likelihood the Fed is more cautious on Wednesday, cutting rates by 0.25 percentage points. But he notes that it it is a close call that depends on the dynamics of the bank’s rate-setting committee and the strength or weakness of Tuesday’s retail sales report.

A positive surprise would suggest that both consumers and the labor market remain resilient, paving the way for a more modest cut. If the report comes in well below expectations, however, Fed officials may grow concerned that a weaker labor market is weighing on consumer spending, which could lead to a bigger cut, Hollenhorst added.

Louis Navellier, founder and chief investment officer of the money-management firm Navellier agrees. “In theory, if the August retail sales report is horrible, then a 0.5% Fed key interest rate cut may be forthcoming on Wednesday,” he said.

Economists are expecting retail sales will decline by 0.2% in August from July, according to FactSet. They jumped by a surprising 1% in July .

Lower gasoline prices and car sales will likely drag the headline number lower. Indeed, stripping out car and gas sales, retail sales are projected to increase by about 0.3% month over month.

Yet there is growing concern that even excluding autos and gas sales, the sales figure will be soft. While spending was remarkably strong in July, the Fed’s latest Beige Book flagged that consumer spending ticked down in August, points out Bill Adams, chief economist for Comerica Bank . Many retailers, particularly those catering to lower-income shoppers, have warned that Americans are being cautious and exceedingly choosy about what they are buying and where.

The impact of the retail sales report will likely extend beyond the immediate rate cut. The insights it contains about U.S. consumers will also factor into the Fed’s quarterly update to its Summary of Economic Projections, containing officials’ latest forecasts for the U.S. economy, inflation, and near-term interest rates.

The so-called dot plot , which charts the individual interest-rate projections of the seven members of the Fed’s board of governors and the 12 regional Fed presidents, is always closely watched as investors try to chart the Fed’s future actions.

Hollenhorst believes the median dot showing where rates will be at the end of 2024 should show “at least” 0.75 percentage-point of cuts, factoring in 0.25 point at each meeting through the end of the year. But it is likely that officials will leave the door open for more cuts in case data on the job market or consumer spending sour faster than expected.