Bitcoin's Global Love Affair: Country-Wise Investment Insights

Bitcoin and other cryptocurrencies have become increasingly popular worldwide, with some countries embracing them more than others. In 2020, Africa and Latin America showed more interest in Bitcoin than some of the world's developed economies, with Nigeria's Bitcoin trading volume twice as high as that of the eurozone. As of 2023, India owned the most Bitcoins, while Brazil and Indonesia tied for the highest percentage of their population owning cryptocurrency at 41%. The United Arab Emirates (UAE) and Singapore also have high levels of crypto ownership, with 35% and 30% of their populations owning crypto, respectively. The United States has the most crypto owners in terms of numbers, with roughly 13% of its population owning some form of cryptocurrency. While some countries have embraced Bitcoin, others have implemented anti-crypto legislation and hard policies towards banks and businesses adopting it. Friendly countries include Malta, Bermuda, Switzerland, Singapore, Estonia, Georgia, Belarus, Hong Kong, and Japan, which offer tax incentives, favourable regulations, and progressive stances towards crypto businesses and investments.

Brazil and Indonesia are the top two countries with the highest percentage of their population owning cryptocurrency at 41%

Brazil and Indonesia are the top two countries with the highest percentage of their population owning cryptocurrency. A survey by the cryptocurrency exchange Gemini found that 41% of the surveyed people from these nations owned bitcoin or other digital currencies. This is significantly higher than the percentage of the population owning cryptocurrency in the United States (20%) and the United Kingdom (18%).

The survey, which questioned nearly 30,000 people across 20 countries, found that the main motive for those who have already invested in cryptocurrency is its long-term investment potential. This is especially true in countries that have experienced significant economic crises or currency devaluation, such as Brazil and Indonesia. In these countries, investors perceive cryptocurrency as a hedge against inflation and currency depreciation.

In Brazil, there is a friendly stance towards cryptocurrency at both the local and national government levels. For example, the mayor of Rio de Janeiro, Eduardo Paes, presented his intentions to allocate 1% of the city's Treasury in bitcoin, and the authorities in the city have announced that residents will be able to pay taxes in digital currencies as of 2023. On the other hand, the Indonesian government has taken a more cautious approach. The National Ulema Council (MUI) proposed a ban on the use of cryptocurrency, citing Sharia law, and the country's top monetary watchdog, the Financial Services Authority (OJK), has also prohibited local firms from offering or facilitating cryptocurrency services.

Despite the differences in government attitudes, Brazil and Indonesia have the highest percentage of their population owning cryptocurrency, indicating that these countries are embracing the technology and its potential benefits.

The UK owns 18% of the world's cryptocurrencies

The UK has a significant appetite for cryptocurrency investment. As of 2024, the UK owns 18% of the world's cryptocurrencies. Popular coins used in the UK include Litecoin, Ethereum, and Bitcoin. The UK's Financial Conduct Authority estimated there were over 20,000 different cryptocurrencies at the start of 2023, although many were no longer traded and would never grow significantly.

The UK's cryptocurrency market is projected to reach US$2.5 billion in 2024, with an annual growth rate of 10.27% from 2024 to 2028, resulting in a total amount of US$3.7 billion. The average revenue per user in the UK's cryptocurrency market is expected to be US$125.3 in 2024.

In terms of global context, the UK is one of the top 20 GDP per capita nations with significant crypto adoption, along with the US. Crypto adoption is generally more prevalent in less wealthy nations, according to reports like the Global Crypto Adoption Index.

The UK's interest in cryptocurrency is reflected in the launch of PayPal's cryptocurrency service in the country, commonly known as "Britcoin." This service allows UK residents to buy, sell, and hold cryptocurrencies through their PayPal accounts.

The US has the most crypto owners at roughly 13% of its population

The United States has the highest number of cryptocurrency owners, with roughly 13% of its population owning some form of crypto. This equates to approximately 46 million people. This figure is even more impressive when you consider that the global average cryptocurrency ownership rate is estimated to be 6.8%, with over 560 million cryptocurrency users worldwide.

The US also has the highest number of crypto owners when you don't adjust for purchasing power parity (PPP). PPP takes into account the average purchasing power of citizens in each country. However, when you look at the number of crypto users by country per capita, Thailand takes the top spot. A 2021 report from Finbold found that 20% of Thai residents hold some form of crypto.

The US's position as the leader in crypto ownership is perhaps unsurprising when you consider that, in 2021, 94% of all cryptocurrency buyers were millennials and Gen Zs under the age of 40. The US is known for its large millennial and Gen Z populations. Additionally, over 85% of US merchants view enabling cryptocurrency payments as a high priority, and merchants who accepted such payments saw an average ROI of 327% and an increase of up to 40% of new customers.

The US's forward-thinking approach to cryptocurrency is also reflected in its position as the only industrialised country in the top 10 of Chainalysis' 2022 Global Crypto Adoption Index. This suggests that crypto is most influential in less wealthy nations. However, the US is an exception to this trend, perhaps because it has a large domestic market and a strong dollar.

Malta, Bermuda, and Switzerland are considered some of the most welcoming countries towards Bitcoin business opportunities

Malta, a small island nation in Southern Europe, has actively been courting crypto businesses. In July 2018, the Maltese Parliament passed three laws to establish a regulatory framework for blockchain technology, earning the country the nickname "Blockchain Island". The country offers crypto startups a favourable regulatory environment, low corporate tax rates, and the possibility of opening EU bank accounts. Malta also has a bright outlook for cryptocurrencies, with Binance, the largest crypto exchange by volume, relocating its headquarters to the island. Additionally, Maltese taxes on Bitcoin are relatively low, with no property tax and a 15% income tax on foreign-sourced income remitted to a Maltese bank account.

Bermuda, a small Caribbean island and former British colony, is also taking big steps to become a Bitcoin haven. The country has passed legislation to attract crypto businesses and startups, including a law allowing for fast approval of ICOs. Bermuda's light taxation policies extend to Bitcoin, which is not recognised as legal tender and is therefore tax-free. The country also has no VAT, corporate income, wealth, or capital gains taxes, making it an attractive destination for high-net-worth individuals and corporations. Binance, the largest crypto business with ties to Bermuda, has invested $15 million into the country, recognising its potential as a crypto hub.

Switzerland, a prosperous and politically neutral country in Central Europe, is known for its privacy-focused banking system. The Swiss town of Zug, nicknamed "Crypto Valley", has passed progressive laws regarding crypto and related businesses, even approving Bitcoin as payment for utility bills. Switzerland has become a hub for initial coin offerings (ICOs), with the Ethereum Foundation based in Zug and the exchange Shapeshift incorporated in the country. Swiss taxes on Bitcoin are relatively favourable, with crypto holdings subject to wealth taxes and capital gains taxes only applying to those who trade crypto professionally. The country's economic minister has expressed intentions to become a major crypto-nation, recognising the potential of the industry.

Overall, Malta, Bermuda, and Switzerland have all actively adjusted their legislation and created favourable regulatory environments to welcome Bitcoin and blockchain projects, making them attractive destinations for crypto businesses and investors.

Germany has a love-hate relationship with Bitcoin

Germany has a complex relationship with Bitcoin, with a mix of enthusiasm and scepticism. On the one hand, Germany's capital, Berlin, has been dubbed the "Bitcoin Capital of Europe" by The Guardian due to the widespread acceptance of the cryptocurrency in the city. Germany is also a leader in Bitcoin adoption, with over 25% of young Germans surveyed by the German Consumer Center willing to invest in cryptocurrency. Additionally, a new law passed in April 2021 allows institutional investment into the cryptocurrency market, with wealth and institutional investment fund managers (Spezialfonds) able to invest up to 20% of their portfolio in crypto. This move could attract as much as €350 billion (~$425 billion) in investment. Germany is also one of the world's most crypto-friendly countries, with favourable tax rules and stable regulations.

On the other hand, Germany has also witnessed scams and fraudulent activities related to cryptocurrency. For example, German authorities raided a scam call centre in October 2021, which had set up companies in Georgia targeting people in Europe with assurances of high profits. Additionally, Germany-based cryptocurrency pyramid schemes, such as Karatbars, have scammed individuals out of millions of dollars.

In terms of taxation, Germany treats cryptocurrencies as ordinary intangible assets for income tax purposes. Capital gains on cryptocurrencies are completely tax-free after a holding period of at least one year. However, mining activities can quickly fall into the commercial sector, making profits taxable. While Germany has a positive stance on Bitcoin and cryptocurrency, the existence of scams and the need for clear taxation guidelines highlight a cautious approach. Overall, Germany's relationship with Bitcoin is a nuanced one, with both positive adoption and regulatory considerations influencing its stance.

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