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If Bitcoin were to hit $1 million, anyone with at least 30 BTC would instantly become an ultra-high net worth individual (UHNWI). That would make BTC the single largest driver of UHNWIs.

Ultra-High Net Worth Individuals

A UHNWI is someone with at least $30 million in disposal assets, net of liabilities.

As of late last year, according to a Wealth-X report, there were 265,490 UHNWIs with a combined wealth of $32 trillion. That figure is expected to climb to just under 300,000 people by 2021.

If Bitcoin were to hit the magical million-dollar mark, anyone holding 30 BTC would become a UHNWI.According to a recent analysis by Decentralised.co, as of Dec. 5, over 28 million addresses held more than 0 Bitcoin.

130 held more than 10,000 BTC. Crucially, there are over 152,000 Bitcoin wallets with more than 10 Bitcoin.Of those, around 90,000 hold less than 100. Put otherwise, more than 10 but less than 100.




Courtesy Decentralised.co, Number of Bitcoin wallets by amount over time

A Hypothesis about a $1 Million Bitcoin Price

As a thought experiment, assume that the average holdings of those who own between 10 and 100 Bitcoin are 30 BTC.It then follows that if Bitcoin were to hit $1 million, the average holder among the 152,000 would become UHNWIs.This is roughly in line with Tuur Demeester’s recent thought-starter, although he defines UHNWIs as those with at least $50 million in net assets.

Tuur Demeester@TuurDemeester

If the Bitcoin price rises to over $1M, that would give ~100k bitcoiners "Ultra High Net Worth Individual" status (+$50M). With worldwide UHNWIs projected at only ~200k by 2022, this means the Bitcoin 1% could by then make up 30-50% of the world's financial elites. #Disruption




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Under the assumptions above, if Bitcoin hit the improbable $1 million next year, 152,000 newly minted UHNWIs would join the anticipated 300,000 mentioned above.Critically, Bitcoin ultra-high net worth individuals would represent a third of the world’s uber-rich.

Traditional Paths to Becoming a UHNWI

Ultra-high net worth individuals have tended to coalesce around ten cities that, combined, are home to almost 20% of the world’s richest.Hong Kong, New York, and Singapore, along with the countries of Luxembourg and Switzerland, have the greatest density of UHNWIs per person. Hong Kong easily tops that list with one UHNWI per 1,364 people.

Boston Consulting Group found in 2013 that the primary driver of wealth was “returns on existing assets.” Existing assets contributed about $15 trillion to private wealth, with newly created assets contributing around one-quarter of that. 




Courtesy Boston Consulting Group, Wealth generation in 2013While a million-dollar Bitcoin price tag would result in a dramatic shift in the makeup of the ultra-high net worth club, Forbes’ 2019 rich list reported that five of the ten richest people in the world all made their fortunes in the technology industry.

They include the two wealthiest individuals in Jeff Bezos and Bill Gates. Larry Ellison, Mark Zuckerberg, and Larry Page fill out the top five in tech billionaires.In fact, 18 of the richest hundred people in the world have technology backgrounds.

Fashion and retail have an equal number of moguls in the top 100. In finance, that number is ten.

The energy sector contributes only six people to the world’s richest 100.

In other words, while new cryptocurrency wealth would have an outsized impact on the number of UHNWIs, technology has already revolutionized the way wealth is created.  
 

Will Bitcoin Increase UHNWI Individuals by One-Third?

Bitcoin has created newly minted millionaires and billionaires, with many of them remaining anonymous.

According to BitInfoCharts, there are over 14,000 addresses with balances between 100 and 1,000 Bitcoin. A further 2,003 BTC addresses have between 1,000 and 10,000 Bitcoin, and 102 addresses hold between 10,000 to 100,000 BTC.

Three wallets hold amounts exceeding 100,000 BTC and under one million. It must be remembered that the largest Bitcoin wallets are commingled assets sitting at exchanges.

According to Glassnode Insights, entities that held 100,000 or more BTC were all exchanges: Coinbase (983,800 BTC), Huobi (369,100 BTC), Binance (240,700 BTC), Bitfinex (214,600 BTC), Bitstamp (165,400 BTC), Kraken (132,100 BTC), and Bittrex (118,100 BTC).

Those entities accounted for around 13% of Bitcoin’s circulating supply.Whale addresses aside, the 152,000 addresses with balances anywhere between 10 and 100 BTC will create a subset of Bitcoin millionaires were Bitcoin to reach the $1 million mark.

The impact would be felt as widely as cryptocurrencies are currently being used and held.For that to happen, of course, Bitcoin would have to go on a parabolic price surge from now to the end of 2021. But parabolic price movements aren’t exactly unprecedented.

As an asset class, Bitcoin returned over nine million percent in returns from July 2010 to the end of the decade. The S&P 500 tripled and gold rose by 25% in the same period.

With cryptocurrency, history has proven that anything, from brutal bear market slides to upward surges, is possible.

And as the new decade dawns, from the gradual movement of institutional money into the space, Jack Dorsey’s endeavors to make Bitcoin spendable, and the looming supply shock of the third halving, the future is filled with endless possibilities.

Liechtenstein, one of the smallest, but richest, nations, has taken further steps to ingrain itself as a potential blockchain and cryptocurrency powerhouse with a new unanimously passed Act.

The Act on Tokens and Entities Providing Services Based on Trusted Technologies (TVTG), also known as the Blockchain Act, will see comprehensive and precise regulation of the token economy from January 1, 2020.

This announcement, as claimed by the Liechtenstein parliament, makes it the first country to round out a full and regulatory framework around the token economy. The Act provides assurances on combating money laundering, added protections for token investors, and intends to clearly spell out the regulation around this emerging financial technology space.

It is this sort of regulatory certainty that many who operate in the cryptocurrency and blockchain space have been baying for. Countries and their regulatory bodies are beginning to outline the parameters of how this nascent ecosystem can operate in existing legal frameworks, but there is still much ambiguity.

A Center for Token Innovation

Liechtenstein’s Prime Minister Adrian Hasler said of this landmark passing:“With the TVTG an essential element of the financial center strategy of the government is implemented and Liechtenstein is positioned as an innovative and legally secure location for providers in the token economy.

”Indeed, there have been many occurrences of smaller nations looking to position themselves as blockchain leaders to profit from an incoming wave of innovation and capital in the space. Malta, for instance, has become an attractive European headquarters for many a cryptocurrency and blockchain company – including Binance.

Now, Liechtenstein will be looking to take a share in that growing market, especially across Europe, with its clear and friendly regulations for blockchain and cryptocurrency.

Already, on the mainland, Switzerland – and its ‘Crypto Valley’ Zug – provide shelter for token businesses such as Facebook’s Libra Association, in which BeInCrypto has previously reported on, but Liechtenstein may well take the lead following the initiation of this Act.

Already a Hotspot

Even before the Act’s passing, many companies made their homes in Liechtenstein for its open and friendly attitude to cryptocurrency. With this new passing, though, the likes of the Cryptocurrency trading platform Bittrex, and its new platform Bittrex Global already there, will be able to fall back on clear legal boundaries for their operation.

More so, Union Bank AG in Liechtenstein unveiled in August last year that it would be the world’s first regulated bank to issue its own security token alongside news of its Union Bank Payment Coin.

The Union Bank Payment Coin will be a stable coin that is fully backed by fiat currency.Do you think these smaller nations, like Liechtenstein, will be able to take advantage of adjusting to blockchain and crypto quickly to catapult themselves forward?

During the past year, blockchain went from the buzziest word in the tech world to a hot potato no one wanted to hold, in terms of marketing. If you’ve noticed less talk about blockchain this year from technology product makers, that’s on purpose:

Companies have realized big promises without flashy results makes consumers suspicious.

But that doesn’t mean blockchain hasn’t delivered on those promises. The thing is, what blockchain does best is done quietly. A blockchain is basically a growing list of records that are resistant to modification, and therefore extremely secure.

It makes whatever actions, transactions, and activities that occur upon it safe and reliable. And “reliable” isn’t sexy — it’s just something we need, especially in the accounting profession. Ideally, if it’s working well, we won’t even notice it.




And that’s what’s been happening. For instance, Veem, a payments app that debuted in 2014 and has been successful since, allows business users to send payments with no upper limit across borders instantly.

In other words, the app can be used to send $2 or $22 million, and that is only possible because the payments are sent on a blockchain. But Veem doesn’t plaster the word “blockchain” across its PR or advertising, because it doesn’t need to. The app just works.


And that’s what we all want from our technology — it should do what we need it to do, and it should be easy. After that? No questions!

Payments are the obvious first step, in the accounting and finance world, for blockchain application. Providing immutable distributed ledger entries establishes trust and security for the exchange of funds.

Veem is in good company with several other payments platforms, like Circle and Airfox, both based in Boston, and Ripple, which like Veem is based in San Francisco. And these have proved to be the first step to getting blockchain into accounting software itself — for instance, Veem integrates with NetSuite (and has achieved “built for NetSuite” status), essentially embedding blockchain capabilities right into NetSuite, ready for use now.

Another accounting software company, which by request shall remain unnamed, has been trying to build a blockchain platform to underlie its accounting software product, and to thereby provide a product for lenders to assess the credit risk of the businesses using that accounting software (with their permission).

This credit assessment and loan activity would be facilitated by cryptocurrency tokens that the company itself issues. The company has stopped advertising its planned blockchain capabilities because it’s simply been taking far longer than it anticipated to build.

“Currently the market is a very pessimistic environment for the blockchain space, and that’s the biggest challenge,” the founder of the company in question said.

“They’re not so responsive. We’ve reached out to between 10 to 15 crypto exchanges, and barely anyone responded. We might have to go on a second tier exchange.

”Secondly, and also tellingly, it’s been hard to find the right talent. “Our other biggest challenge had been finding the talent that we need to deliver on this kind of project,” the founder said.

“It’s one thing to come up with a great idea, but you need a great team of developers to deliver.”Issues around retaining top talent are not new in tech.

Cybersecurity experts, for instance, are in extremely high demand, and firms have difficulty retaining them without top salaries and attractive project opportunities.

And market skepticism is what has led to blockchain companies to stop the hype, keep their heads down, and work to perfect their product before making big promises.

If you’re interested in the application of blockchain for accountants, be patient. It’s coming, and it will be here before you know it. In fact, it already is.

Yesterday, Netherlands-based credit management firm Onguard published results of a survey conducted by Verdict about the awareness of blockchain and its benefits in the financial services industry.

The report found that about 29% of finance professionals had no idea what blockchain is, and 19% did not know how it could be used within finance, giving a combined 48%.The results are based on a survey of 1,000 finance professionals by Onguard.

However, the most significant lack of awareness was in the more junior ranks. Over 57% of CFO’s are already using or planning to use blockchain. But it seems this knowledge is not trickling down the hierarchy.

About 52% of finance professionals said blockchain was never mentioned in meetings. However, 45% of CFOs said they talk about blockchain once a week, and 17% said they discuss the technology every day.

Onguard found that only 10% of financial professionals perceive blockchain to be a disruptive technology. Cloud solutions (38%), AI (32%) and big data (30%) are expected to have the most significant impact on the finance sector, the survey said.

Greater awareness of these other technologies contributed to the 67% of finance professionals who were either planning deployment or using new technologies such as AI and blockchain.

Those who understand the disruptive potential of blockchain and allied technologies (about 38%) believe financial services firms must update their business models.

About 39% of respondents believe AI and blockchain will have a significant impact on employment in the sector.“In 2018, technologies such as blockchain and artificial intelligence were mostly discredited and labelled as ‘hype’.

However, we can now see that organisations have actually started adopting them,” said Marieke Saeij, CEO, Onguard.Saeij further added:

“While the exact uses of blockchain are not yet defined, the level of activity using this form of technology is only going to increase. […] With nearly two-thirds of CFOs already preparing an initiative related to blockchain, I expect that this is just the beginning of a blockchain revolution.

”Meanwhile, Gartner’s Blockchain Hype Cycle shows finance as in the trough of disillusionment.Below are recent blockchain surveys:

Accenture: blockchain for aerospace
Boston Consulting Group: blockchain for transport and logistics
Cap Gemini blockchain survey
Deloitte 2019 blockchain survey
Deloitte 2018 blockchain survey
EY blockchain (finance and tech professionals) survey
EY fintech adoption survey
EY APAC blockchain survey
IDC semi-annual enterprise blockchain forecast
IHS Markit survey
KPMG technology industry innovation survey
PwC blockchain survey
PwC China blockchain survey
World Energy Council / PwC blockchain survey
SAP blockchain survey
TD Bank payments industry survey
BNY Mellon payments survey
Friss insurance survey
Juniper enterprise blockchain survey
BIS Central Bank Digital Currency survey
IBM / OMFIF Central Bank Digital Currency survey 2018
IBM / OMFIF Central Bank Digital Currency survey 2019
ING general population cryptocurrency attitudes