The number of investors holding $1 mln or more in cryptocurrency has reached 172,000, up 95% from a year earlier. This data follows from the Crypto Wealth Report-2024 by Henley & Partners. How should this rapid growth over the year be evaluated? And what contributed to it?
The 95% YoY growth in the number of crypto millionaires is truly impressive. This number can be attributed to a combination of regulatory changes, the growth of the market value of cryptocurrencies, an increase in institutional investment, and the interconnection of digital assets with traditional finance.
1. The approval by the US Securities and Exchange Commission (SEC) of the first exchange-traded funds (ETFs) for spot trading of Bitcoin and Ethereum led to an increase in institutional investor confidence in cryptocurrencies. This unleashed a flow of institutional capital, which tracked the prices of crypto assets higher.
2. Bitcoin’s bull run above $73k in March set a new all-time high. Bitcoin’s high price has led to an increase in the number of millionaires owning this asset. Similarly, the integration of Ethereum into the mainstream financial markets has also led to its growth.
3. Following the approval of Bitcoin and Ethereum spot ETFs, institutional investors have been actively investing in cryptocurrencies, which has led to a sharp rise in the market value of crypto assets.
4. Digital assets are increasingly integrated with traditional financial systems. This interconnection makes cryptocurrencies more attractive to large investors and financial institutions.
The confluence of these factors have laid the groundwork for a sharp rise in the number of large investors in cryptocurrencies.