U.S. loses top spot as most favorable crypto economy, Germany now the sole leader

U.S. loses top spot as most favorable crypto economy, Germany now the sole leader

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(Kitco News) – The United States is no longer the most favorable crypto economy in the world, according to the most recent report from Conicub, which shows the country fell from first to seventh place in Q3 of 2022. 

Coincub compiles its rankings based on various factors such as favorable crypto outlook, clear crypto tax rules and more transparent regulatory communications to rank countries.

Germany is now the sole leader in terms of having the most favorable crypto economy after sharing the top rank with the U.S. at the end of Q2. The country is widely considered to be one of the most rewarding for crypto holders from a tax standpoint as German law charges zero tax on crypto held for more than a year. 

Switzerland now ranks second due to its positive crypto regulations and the fact that it is home to some of the top crypto organizations in the world, many of which can be found in Zug, a small town that is a popular location where companies like to incorporate that is often referred to as “Crypto Valley.”

Rounding out the top five are Australia, UAE and Singapore. 

Coincub Q3 global crypto ranking. Source: Coincub

Reasons for the decline of the U.S. revolved around its unfavorable crypto tax policy and lack of regulatory clarity. Despite its fall to seventh, the U.S. still ranks high in the category of “populations hoarding crypto,” with Americans ranking second (13%) in terms of the percentage of the population that holds and trades crypto behind Vietnam, where 20% of the population is invested in crypto.  

In terms of crypto activity, which includes the growth of new crypto exchanges, start-up blockchain companies, and the issuance of new coins continues to grow as the industry widens in scope, the U.S. came in at the top of the list with over 100 new crypto-related companies in Q3. The UK ranked second with 21, followed by Singapore with 13 and Switzerland with 10. 

Also of note, the U.S. is the only country that allows crypto to be included as part of strategic workplace pensions. It’s possible that the current legislation making its way through the U.S. legislative process could lead to a significant improvement in its rankings by the end of Q4.  

El Salvador topped the list of the most crypto-curious nations determined by the number of “Bitcoin” related searches, followed by Nigeria and the Central African Republic.

High net worth investors prefer direct access to cryptos 

As headlines are filled with stories about the latest Bitcoin ETF rejection, a recent survey of global wealth managers conducted by GlobalData, a leading data and analytics company, shows that an increasing number of high-net-worth (HNW) investors are more interested in acquiring actual crypto assets as opposed to investing in funds. 

While the average HNW’s portfolio currently holds only 1.4% in crypto, that figure is expected to increase in the coming years as adoption ticks higher. 

According to Sergel Woldemichael, senior wealth management analyst at GlobalData, there’s a sizeable portion of HNW investors who are aware of the risks involved with investing in crypto and prefer direct access for the possibility of outsized gains as opposed to the safety of funds. 

“The potential of heightened returns is what pulls investors to the asset class; as it only takes up a small proportion of their portfolio, they are happy to take maximum risk,” Woldemichael said. 

“Although some wealth managers still question cryptocurrency and its longevity, customer demand has forced the hand of global players. For those that want to hold on to as much client wealth as possible, offering both a direct route into crypto investing as well as a fund option is essential.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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