The US loses its top spot as the most favorable crypto economy, Germany is 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 latest report from Conicub, which shows that the country fell from first to seventh place in the 3rd quarter of 2022.

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

Germany is now the sole leader in terms of having the most favorable crypto economy after sharing the top ranking with the US at the end of Q2. The country is considered to be one of the most rewarding for crypto holders from a tax point of view, as German law requires zero tax on crypto held for more than one year.

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

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

Coincub Q3 Global Crypto Ranking. Source: Coincube

The reasons for the decline of the US revolved around its unfavorable crypto tax policy and lack of regulatory clarity. Despite the drop to seventh, the US still ranks highly in the “crypto hoarding populations” category, with Americans second (13%) in terms of the percentage of the population holding and trading 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, startup blockchain companies, and the issuance of new coins continues to grow as the industry expands in scale, the US topped the list with over 100 new crypto-related companies in Q3. The UK was second with 21, followed by Singapore with 13 and Switzerland with 10.

It is also worth noting that the US is the only country that allows crypto to be included as part of strategic workplace pensions. It is possible that current legislation moving through the US legislative process could lead to a significant improvement in the ranking by the end of the fourth quarter.

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

High net worth investors prefer direct access to crypto

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

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

According to Sergel Woldemichael, senior wealth management analyst at GlobalData, there is a significant portion of HNW investors who are aware of the risks associated with investing in crypto and prefer direct access for the possibility of large gains as opposed to the safety of mutual funds.

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

“Although some asset managers still question cryptocurrency and its longevity, client demand has forced the hand of global players. For those looking to hold as much client wealth as possible, it is important to offer both a direct route into crypto investment and a fund alternative.”