American Crossroads: Crypto and citizenship in today's economy

The United States has found itself in a precarious financial situation characterised by extreme debt at US$34 trillion and inadequate GDP growth to service this debt. Since the financial crisis of 2008, policymakers have resorted to the strategy of expanding the money supply, a tactic fraught with consequences. This influx of currency has eroded the value of the dollar through inflation, a heavy levy that silently diminishes the purchasing power of every citizen. While traditional tax mechanisms are subject to public scrutiny and resistance, the subtle nature of currency debasement allows governments to covertly divert wealth from their citizens.

Amidst this grim economic backdrop, there’s a sense of risk-taking inherent in all of us, each with varying risk tolerances. With the recent launch of crypto exchange-traded funds (ETFs) by institutional players like Blackrock, who launched a Bitcoin ETF and more recently announced the launch of the first tokenised fund on ETH, cryptocurrencies are becoming more accessible and seemingly legitimised as an asset class within the traditional finance space.

This newfound accessibility to cryptocurrencies, facilitated by institutional endorsement, is transforming the financial landscape into a domain akin to a high-stakes casino, where fortunes are won and lost with remarkable frequency. What is most interesting is that it’s the ‘noob’ BTC investors who are spearheading this dominance in 2024.

Indeed, we’re all betting on our futures, especially in an overly indebted society where asset ownership holds significant importance as an insurance policy. Cryptocurrencies, led by Bitcoin, emerge as a hedge against the erosive forces of inflation and the inexorable decline of fiat currencies. There is a strong belief in the transformative power of cryptocurrencies transcending mere financial speculation, embodying a broader paradigm shift towards decentralised governance and economic sovereignty.

Simultaneously, the surge in applications for citizenship by investment (CBI) programmes underscores a growing recognition among investors of the need to diversify and safeguard their assets against geopolitical and tax risks. Traditionalists from the traditional finance sector, alongside decentralised enthusiasts affectionately known as “crypto degens,” seek refuge in jurisdictions offering robust citizenship and residency programmes, such as those in Europe and the Caribbean. Dual citizenship emerges as a strategic imperative, offering not only financial diversification but also philosophical alignment with principles of decentralisation and freedom.

Within this dynamic mix, dual citizenship and the cryptocurrency revolution play pivotal roles in reshaping how individuals navigate global terrains, ushering in a new era of financial and personal autonomy.

Investors hailing from traditional finance tend to gravitate towards Europe, particularly countries like Portugal and Malta, attracted by their robust citizenship and residency by investment programmes, with entry costs starting at approximately US$500,000. Traditionalists may prefer holding a second citizenship in a country that resembles their home country most.

Apex Capital Partners has observed an unprecedented surge in citizenship applications during Q1 and Q2 of 2024. This surge can be attributed to various events, including the bullish sentiment in the crypto market after Bitcoin halved in April, heightened geopolitical uncertainty due to the upcoming US elections - prompting individuals to seek second passports as a hedge against risks - and the recent announcement by Caribbean CBI countries to collectively increase the minimum investment to qualify for citizenship in the second half of 2024.

It’s evident that citizenship by investment programmes have taken centre stage, attracting interest from professionals seeking insurance policies, governments enhancing their respective CBI programmes, and European governmental organisations pressuring CBI countries to raise their prices to deter investors from benefiting from visa-free access to their countries.

CBI programmes offer not only substantial benefits for investors but also for host countries, highlighting the necessity of transparent and robust processes to maintain their global mobility status with various countries. With an evident surge in interest, it’s clear that the value and importance of CBI programmes are on the rise.

For investors navigating this dynamic landscape, cryptocurrencies and citizenship by investment represent indispensable tools for safeguarding wealth and securing financial autonomy. In an era defined by digital innovation and economic upheaval, these assets offer a beacon of stability amidst turbulent times, heralding a broader shift towards financial independence and sovereignty.

We stand at the dawn of an ‘economic discovery’ phase where the familiar contours of the past increasingly diverge from the unfolding future. In this evolving landscape, traditional finance, crypto enthusiasts, and the aspirations of everyday investors intersect, each seeking their version of freedom. Within this dynamic mix, dual citizenship and the cryptocurrency revolution play pivotal roles in reshaping how individuals navigate global terrains, ushering in a new era of financial and personal autonomy.

‘He who owns assets wins.” Raoul Paul

By Kara Doherty, Managing Director of Apex Capital Partners, Antigua