Meet the Crypto Billionaires Club – What the Rising Numbers Mean
Of CNBCTV18.com IST (updated)
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Not so long ago, the combined market capitalization of major cryptocurrencies such as Bitcoin and Ethereum was a few billion dollars. These projects led to the emergence of the first crypto millionaires. Here’s a look at the new breed of billionaires who have made it onto the rich lists
Not so long ago, the combined market capitalization of major cryptocurrencies such as Bitcoin and Ethereum was a few billion dollars. These projects led to the emergence of the first crypto millionaires, who traded and accumulated tokens as their value grew from nothing to something.
Now, when individual cryptos have market capitalizations that often cross a trillion dollars, several crypto-billionaires have emerged, a group that has expanded over the past couple of years.
These wealthy individuals run businesses based on crypto-like centralized exchanges and Decentralized Finance (DeFi) protocols. They may also be crypto whales who have accumulated tokens that are now worth large fortunes.
Here’s a look at the new breed of billionaires who have made it to the rich lists and also the road ahead
The Crypto Billionaires Club
When Forbes started ranking the crypto rich, it had its own separate list with a cut-off of around $350 million to make the list. Today, there seems to be no need for another list, as 19 of the crypto-rich are now on the Forbes Billionaires Index itself.
The richest known crypto-billionaire in the world today is the founder of Binance, Chanpeng Zhao, with an estimated net worth of over $65 billion. Most of his wealth comes from his ownership of Binance (about 70 percent of it) and his whale-like holdings in BTC and BNB (the original token of Binance). Binance is currently the world’s largest crypto exchange and has had a turnover of over $16 billion in the past year.
Second on the list with a net worth of around $24 billion is the founder of Hong Kong-based crypto exchange FTX, Sam Bankman-Fried. He moved from Hong Kong to the more crypto-friendly environment of the Bahamas to continue building FTX, which has now become the darling of venture capital firms like Sequoia.
Other billionaires who have made the list include Ripple’s Chris Larsen, the infamous Cameron and Tyler Winklevoss and South Korea’s UpBit founder Song Chi-Hyung. The list of crypto billionaires currently consists of fewer traders, early investors and more founders of exchanges and blockchains. This is quite natural in an industry that has yet to reach most of the masses.
The hidden wealth
In the list above, we do not see the names of Satoshi Nakamoto or Vitalik Buterin because they have not fully disclosed the number of tokens they currently hold. According to some estimates, the pseudonymous founder of bitcoin has almost a million bitcoins, which would already make them one of the richest people on the planet.
The examples above are the big ones, but there are many more high-net-worth whales that are still unnamed and likely will continue to be, given the transparent yet pseudonymous beauty of cryptocurrency.
What does rising billionaires mean?
The list has increased by over 40 per cent this year, and there will soon be more people joining this elite group. So, what does the bigger picture look like?
1. Increased adoption
With crypto exchange founders and investors joining the triple-comma club, it seems that more and more people are actively involved in cryptocurrency. For now, this adoption is largely limited to crypto investors and traders. However, the initial utility of tokens and DeFi protocols may also increase over time.
2. Desired investments
Billions are pouring into the crypto economy. This causes the prices of the various tokens to rise, turning the whales into billionaires. It is a sign that the common person is also seeing the benefits of crypto and using it as a store of wealth.
3. Innovation bonanza
With exponentially growing fortunes, those at the helm of crypto platforms can pump more resources into research and development. This leads to additional innovation and progression of blockchain and crypto technologies. Moreover, spurred on by the enormous wealth that early founders and developers have amassed through their projects, budding developers are inspired to push the envelope and build better systems.
4. An early sign of inequality
Inequal distribution of wealth is a cause for concern in state-run finance, and crypto was seen as the answer to this problem. But what we see is still more of the same, and it may have more to do with how human greed works than anything finance-related.
Conclusion
A growing case of billionaires emerges when a new technology gains mass adoption. That’s what happened with the industrial revolution, with oil and fossil fuels, software and computers, social media and now cryptocurrency. It is undeniably what will shape our near future. And while some see the growing list of crypto riches as disproportionate wealth, there will always be capitalists who call it a reward for innovation.
First published: IST
