Financial security is imperative in 2022, and people have probably figured this out by now. Traditional finance is getting riskier by the day, and we have plenty of examples to support this statement. Just take, what’s been going on in Russia as an example. You should be aware of what’s going on there following the latest sanctions that the country saw after their President’s actions against Ukraine.
As the press agency Reuters recently revealed, crypto companies in the United Arab Emirates are being flooded with tons of requests from Russian people who are trying their best to liquidate billions of dollars of digital assets. They are currently seeking a safe haven for their fortunes, according to many financial sources.
At the moment, due to the sanctions, they cannot use their credit and debit cards emitted by Visa and Mastercard by Russian banks. What’s terrible is the fact that they cannot use them anywhere in the world. It’s safe to say the fact that this is the main reason for which they turned to crypto following the sanctions that Russia saw.
Why traditional finance is not safe – crypto is the answer
Coindesk, which is a crucial crypto publication, notes that the crypto firms based in the UAE have been seeing tons of requests by Russian clients to liquidate billions of dollars worth of digital assets.
More than that, also think about Canada, and the fate of the Truckers Convoy – their bank accounts were frozen as well, and this happened due to the fact that they protested against their government. What does this tell us? In terms of fiat money and traditional banking systems, we are not exactly the owners of our wealth, and it is more than serious in 2022.
But luckily, after the capital’s streets had been all cleared of the trucks following three weeks of protests, the Canadian authorities eventually lifted the freezes of hundreds of bank accounts that were associated with the protest organizers and the Canadians who had blocked Ottawa’s streets.
Isabelle Jacques, an assistant deputy minister in Canada’s department of finance, told a House of Commons committee that the banks had begun unlocking accounts not too long ago and that no more finances would be locked up.
“The vast majority of assets are in the process of being unfrozen,” she said.
Just to refresh your memory, when Prime Minister Justin Trudeau decided to invoke his country’s Emergencies Act for the first time in Canadian history to quell the unrest, it gave the police sweeping new powers to go after the finances of the protesters. People all over the world freaked out at this idea – the fact that someone can gain control over your finances due to your political preferences.
Jacques said that those measures are now being lifted because they were intended to pressure protesters to leave the city’s streets, according to reports coming from New York Times.
Crypto prevents this from happening, and what had been going on in Canada has been basically advertising the benefits of crypto.
After two years in which we suffered enough amidst worldwide lockdowns due to the pandemic, not being able to use your own money during such stressful times can be a nightmare. More and more people understand that having your money kept in banks takes away the control that you have over your own wealth, and this is the last thing someone would want, especially during the troubled times in which we live.
This is where crypto steps in and boosts the game. Crypto and their underlying tech are exactly what’s missing from our financial needs in 2022 – freedom and ownership over our own wealth.
Do we need crypto?
Long story short, the answer is yes, you definitely need crypto in 2022. Besides the fact that digital assets are one of the best investments that you can make this year, Bitcoin and crypto in general turned out to be a store safe haven as well.
Crypto started as a bold project, but it was seen as extremely and highly volatile. Thankfully, times have changed, and so did crypto. These changes that we are referring to have been exciting and fascinating.
As the publication Morning Star notes, with the advent of crypto ETFs in Canada, retail wealth managers are still trying to find a reason for which crypto should be a part of client portfolios.
“When we look at traditional assets, we’re looking at long-term trends to produce alpha. For example, when building a portfolio of stocks, you’d be looking at factors such as price, profitability, and market cap. These principles don’t apply when looking at crypto for various reasons, and therefore it isn’t easy to compare,” – this is what Adam Henry, investment associate and resident crypto expert for Harbourfront Wealth Management in Winnipeg, said.
Given the lack of information, “the best way we approach this question is to look at where the client is from a time horizon perspective to retirement.”
Henry also made sure to point out the fact that a specific allocation could be the right thing to do if the investor is in an accumulation phase. This is recommended only as a speculative bet, and at most 5%.
It’s also worth noting that the sole benefit Kemp says crypto has is that it would be a portfolio diversifier.
“However, diversification expectations should be driven by some fundamental characteristics of the asset the security and supported by limited supply,” he said not too long ago.
On the other hand, all the crises that humanity had been seeing since the start of the pandemic back in 2020 have shown the same thing – crypto turned out to be a resilient and strong investment. It offers people to opportunity to be their own wealth guardians.
Benefits and risks of investing in crypto in 2022
As with any investment out there, of course, investing in crypto comes with its own risks and also benefits as well. Forbes recently released a piece on the risks and advantages of investing in cryptocurrencies.
The article posted by Forbes is called Benefits and Risks of Buying Bitcoin for Your Retirement Plan.
The author addresses retirement savings accounts and analyzes whether it’s a good choice to invest in crypto thinking about retirement plans. Forbes quotes an important person and notes the following:
“Cryptocurrency is digital currency that’s not part of a bank and is designed to be free from government control — or perhaps better put, a digital, decentralized currency,” This is what Stuart Robertson, CEO of ShareBuilder 401k in Seattle said.
He continued and explained the following: “It can be used for the purchase of goods and services wherever it is accepted, and items may be bought anonymously.” He also made sure to explain the fact that Bitcoin is the most popular player in the crypto space, but there are also other digital assets that are worth taking into consideration.
The prestigious publication also talks about the recent push to allow retirement plans to invest in the new industry of cryptos and their underlying tech, the blockchain. This push is not coming from the people who profit from sales but also from beginner investors, according to the notes.
“With over $32 trillion in retirement funds and approximately $12 trillion of IRAs, most Americans use the retirement system as their primary source for wealth accumulation.”
This is what Adam Bergman, CEO, and Founder of IRA Financial in Miami Beach said. He also said that most of American people are using their retirement accounts as their main savings vehicle. But with the massive popularity of crypto which is still on the rise, more and more people are turning towards digital assets these days.
Bergman also explained the fact that crypto is still highly volatile and all investors who are interested in the digital assets used for retirement funds should proceed with caution.
“It’s not just the performance history, but cryptocurrencies come with other risks,” says Jahon Jamali, Co-Founder and Chief Marketing Officer at Sarson Funds in Sherman Oaks, California. He continued and said that this asset class is still young and there should be high investor protection involved as a result.
Reducing investment risks
Forbes also addresses the ways in which the risks can be reduced. The investment industry is constantly looking and finding ways to reduce these risks by merging unregulated products with regulated ones. This is happening regardless of the fact that it’s not very clear how much protection this move is actually offering. But this does make the digital assets less compatible with the generally accepted retirement plan platforms and frameworks well.
“Some of the current push may be a result of recent development of investment products that now allow investors to invest in Bitcoin-related returns in publicly registered funds that are regulated under the Investment Company Act of 1940,” says Karan Sood, Head of Product Development at Cboe Vest in McLean, Virginia.
She explained that these products offer protection for investors and this protection is expected following having to deal with regulated funds. She said that some mutual funds are currently already implementing investment strategies that offer Bitcoin and crypto exposure while controlling extreme volatility.
Financial professionals are beginning to see how these new instruments are sliding nicely into the standard portfolio management strategies and tactics as well.
Diversifying your portfolio is starting to look different already and people are now revolutionizing their retirement savings with crypto. This is all part of a new wave of economics that can defend people from massive inflation.
Even if it’s highly volatile, Bitcoin has already managed to historically over-performed every other asset class during the past five years.
Experts’ overall conclusion is that the speculative nature of Bitcoin and crypto requires careful risk management and it’s more appropriate for people willing to take such risks.
A new survey on crypto investment is out
there’s a brand new survey on crypto investment that was revealed a few days ago. CNBC addressed it in their new article. The conclusions include the fact that one in five Americans invested in or traded crypto – this is what the new NBC News poll found out.
This is yet another sign showing the fact that the mass adoption of digital assets continues in 2022. This has been one of the most important goals that the crypto industry has set, and things have been going on the right path towards the achievement of this bold target.
Cryptos had shown their strength and resilience, especially in times of crisis such as the terrible 2020 – the year when the pandemic which managed to change our lives probably for good began.
According to CNBC, “half of the men between the ages of 18 and 49 said they have dabbled in crypto, the highest share of all demographic groups.”
More than that, according to the statistics, 40% of Black Americans said that they have already used or traded crypto, and 42% of all the people between 18 and 34 years old said the very same thing.
21% of the 1,000 Americans polled said they have at least once used or invested in crypto and this is showing the fact that there’s a youth that is interested in this industry.
Crypto enthusiasts highlight the fact that Bitcoin, Ethereum, and more crypto assets are offering higher transaction speeds, lower costs, high privacy and security, and also an opportunity to offer the underbanked communities financial services as well.
Best 8 crypto-friendly countries to invest your wealth in
We can say that a country is crypto-friendly if it marks two essential things: a certain degree to which it regulates crypto and the degree to which it taxes the digital assets. Rules about crypto are getting tighter all over the world, and this is one of the main reasons for which nations which remain friendly with the innovative industry are worth being taken into consideration by people who are considering relocating.
Here are the best crypto-friendly countries listed by NASDAQ that you might want to visit or move to.
Here, the tax authorities adopted a really soft stance on crypto investments. It’s important to note the fact that Portuguese law is known to be extremely crypto-friendly. People here are taking advantage of the purchasing and selling of crypto and are not taxed on the capital gains, and this is a pretty big deal in 2022 when regulators are after crypto like there’s no tomorrow.
NASDAQ notes that the individual investors who are worried about income tax levied on payments that are received in crypto Portugal are very favorable.
On the other hand, it’s important to note the fact that for companies in Portugal, things are quite different. For the firms that receive payment in crypto, there are capital gains taxes that are applied.
Portugal’s tax authorities are quoted as stating that “an exchange of cryptocurrency for ‘real’ currency constitutes an on-demand, VAT-free exercise of services.”
As a conclusion for this country, individual cryptocurrency investors would be wise to consider the country of Portugal for its helpful stance on taxes. But it should be remembered that firms aren’t afforded the same leniency. In other words, it doesn’t seem likely that a wave of companies will be moving to Portugal anytime soon for the benefits.
The country is known and loved for a lot of things, but in terms of financial issues, it’s known for its Swiss banking standards. These allow for the highest level of privacy with very low-risk levels, and this is extremely important in 2022. It does not come as a surprise that this country has very soft regulations for crypto investors as well.
According to NASDAQ’s notes, “the unique system of regions into divisions called cantons plays heavily into what can and cannot be done. Each of Switzerland’s 26 cantons has its own legal definitions regarding the treatment of cryptocurrency.”
The country is popular these days for having one of the most stable and developed economies in the whole world. This is also one of the best places in the world to do business. The country is known as a hub of fintech in Southeast Asia.
The central bank is the Monetary Authority of Singapore. This entity believes that the crypto ecosystem must be monitored to prevent laundering and other illegal activity. On the other hand, they also believe that innovation must not be stifled. All this makes Singapore a balanced regulatory and legal environment for crypto.
Germany sees crypto as private money, and digital assets are not treated as legal tender across the whole nation. The laws involving digital assets favor long-term buy-and-hold investors. It’s important to know the fact that traders of crypto may want to reconsider their plans to use the country in order to avoid taxes. People who have been holding crypto for more than a year will not pay any tax on it regardless of the value. But, according to official notes, investors who are holding digital assets for less than one year, capital gains taxes are levied on amounts above 600 EUR (approximately $712).
Also, it’s good to know the fact that corporations in Germany are subject to capital gains taxes. So for crypto investors with a longer-term view, Germany is an attractive nation to be a part of.
This small island nation in the Mediterranean has been heaven for crypto investors for a long time now, and things continue to remain unchanged, a lot of crypto exchanges and blockchain projects are operating here due to the massive friendliness of the country towards the digital assets.
Malta welcomed the important crypto exchange Binance after Hong Kong tightened its regulations, and the exchange was welcomed here in a friendlier jurisdiction.
This is another Mediterranean island nation that is known for its pretty chill attitude toward crypto, including Bitcoin. Although crypto is not yet regulated here, the country seems to be on a great path toward this move.
According to new reports, the Central Bank of Cyprus is currently looking to be worried about a potential loss, and as a result, it issued official guidelines about crypto risks as far back as 2014. It’s also important to note the fact that the Cyprus Securities and Exchange Commission has established an Innovation Hub. Here, entities can share knowledge in line with their mission to ensure investor protection within regulated entities. But, all in all, regarding the use and acceptance of crypto in Cyprus, things are definitely open.
This is another country that is recommended for those people who are crypto enthusiasts.
Here, one interesting thing that is worth highlighting is that Bermuda’s Digital Asset Business Act 2018 sets out its regime for regulating individuals and entities who are undertaking the following:
“issuing, selling, and redeeming cryptocurrency and other digital assets;
operating as a crypto payment provider, including the provision of services for fund transfers;
operating a cryptocurrency exchange and providing wallet services;
operating a cryptocurrency services vendor.”
All these elements that we just mentioned above are basically dictating the things that constitute digital business in Bermuda. The location levies zero income and capital gains tax.
UAE is another crypto-friendly location, and this is the main reason why a lot of investors are migrating to Dubai these days.
We’ve already addressed the fact that crypto companies in the UAE are currently flooded with Russian who are trying their best to liquidate billions of dollars of crypto. They are currently looking for safe havens for their fortunes, and this is due to how crypto is viewed in the UAE. Dubai is a real paradise for crypto lovers, and there are a lot of signs that support this affirmation.
The UAE is currently operating free zones, which are locations where citizens and nonresidents can incorporate firms to get visas and trade licenses.
Platforms like Crypto Expat are getting the importance of getting a Visa quickly for those interested. According to the official website, Crypto Expat can help prepare a Visa for all individuals who want or plan to retire to the UAE. This way, people can get the chance to build their company easily and enjoy all the benefits of developing it in the UAE.
The UAE offers growing businesses stability, larger markets, steady growth, investor-friendly processes, and a tax-free regime.
The UAE has regulatory approaches for crypto, and the crypto regulation in Dubai, as an example, is a move into the future. The city introduced a regulatory framework for crypto not too long ago, and by introducing crypto regulation, Dubai moves forward into the future and rides the wave of innovation.
The target is to create a comprehensive legal framework. This is set to protect investors and also to get more virtual asset startups to do business here in the UAE. This latest move that’s taking place regarding crypto regulation is nothing else than a promising development of the crypto space industry in this location.
What makes UAE an excellent choice for crypto investors?
It’s important to note the fact that the countries that are included in the European Union are seeing some important changes these days.
The whole crypto space has been shaken by the decision that the EU Parliament took a few days ago. They voted for new regulatory measures. These are basically prohibiting anonymous crypto transactions.
Decrypt online magazine notes that the vote was first reported by CoinDesk, and soon after confirmed to Decrypt by Valeria Cusseddu, advisor to the Committee on Economic and Monetary Affairs.
“The ECON and LIBE committees voted to approve a proposal that would require cryptocurrency service providers, such as exchanges, to collect personally identifiable information from individuals who transact more than 1,000 euros using so-called unhosted cryptocurrency wallets,” according to the same online publication mentioned above.
Though votes on several amendments were tight, the final draft was overwhelmingly approved.
Europe is seeing some changes that will definitely affect the crypto space a lot, and investors are not happy – this is one of the reasons why the UAE is an excellent destination for crypto enthusiasts these days.
When you say crypto, you actually say freedom – this is what Satoshi Nakamoto, the Bitcoin creator, had in mind when he created the king digital asset.
Crypto enthusiasts are doing their best these days in order to try and preserve this vital feature that digital assets have – individuals’ freedom.
The countries mentioned above are some of the best locations that crypto enthusiasts can choose these days. There are more locations around the globe that plan to regulate crypto exchanges with licensing programs.
This means that businesses will have more and more opportunities, and entrepreneurs will have to do a lot of research on these new locations in order to make up their minds before being able to make a final decision. It’s great to know that there are a lot of places around the world that celebrate cryptos and which offer investors great opportunities. Living in a crypto-friendly country is essential in 2022, and the reasons are getting stronger with each passing day.