The Best Places to Live for Crypto Traders and Miners

Would you move to a place that didn't tax crypto?

One of the big attractions of digital currencies is the allure of borderless payments -- it's a monetary system that isn't controlled by any specific country or government. In truth, while Bitcoin (BTC) and other cryptocurrencies are often borderless, the rules around how they can be used and taxed are not.

Each country has different crypto rules and forms of crypto taxation. There are other factors to consider too. Some places have cheap power, making them attractive for crypto miners. Others have lots of stores that accept crypto payments, or a high number of crypto ATMs. We took all of these considerations into account in selecting some of the best places in the world for crypto traders and enthusiasts to live.

1. El Salvador

As the first country to make Bitcoin into legal tender, El Salvador has to top this list. Admittedly, El Salvador's crypto conversion got off to a rocky start. Adoption has been beset by issues, from technical troubles to a general lack of crypto understanding and concerns over volatility. Indeed, the International Monetary Fund continues to urge El Salvador to drop its Bitcoin adoption due to concerns about risks to financial stability.

However, Bitcoin enthusiasts may find a warm welcome in El Salvador. The president has promised favorable visa conditions to Bitcoin investors, though we don't yet know the details. There's also talk of granting foreign investors a tax exemption on crypto profits and building a "Bitcoin City" with additional tax benefits.

All in all, it might be too soon for crypto traders looking for crypto-friendly homes to start making relocation plans. It isn't clear how El Salvador's crypto experiment will turn out or what exactly the country will do to attract crypto investors.

2. California

Many U.S. cities and states are racing to win the title of crypto capital. For example, New York and Miami both have mayors who want to receive their salaries in Bitcoin. Both cities have also launched their own city specific cryptos. However, it is California that topped Crypto Head's list as the most crypto-ready state. In its recent research, Crypto Head looked at the number of crypto ATMs, overall interest in crypto, and crypto legislation.

Bloomberg analysis also showed that San Francisco and Los Angeles are among the top crypto recruiters for 2021. This could be because both Kraken and Coinbase have their headquarters in San Francisco, though Coinbase said it will close its San Francisco offices this year.

In terms of crypto regulation, California's Office of Financial Technology and Innovation is set to introduce new crypto-specific rules. It remains to be seen whether these encourage crypto traders to set up shop in the Golden State, or drive them to seek friendlier locations.

3. Amsterdam

A large number of shops and merchants accept Bitcoin in Amsterdam, and the Dutch capital is also home to several crypto companies, such as BitPay and CryptoRefills. One study analyzed the profiles of active crypto Twitter personalities and showed that Amsterdam is in the top 10 cities for where crypto enthusiasts live. There are no rules prohibiting crypto trading in the Netherlands, though there are anti-money laundering and other compliance protocols in place.

4. Portugal

Portugal is so crypto friendly that the now famous "Bitcoin family" have decided to put down roots there. The Taihuttu family converted their assets and all their worldly goods into Bitcoin back in 2017, and have spent the last five years traveling to over 40 countries. The reason they've chosen Portugal? It doesn't charge capital gains tax on crypto, and crypto transactions are exempt from VAT.

If its reputation as a Bitcoin tax haven wasn't enough, Portugal has also hosted various crypto conferences and events. You can pay in Bitcoin or crypto at a number of different locations, and the country has licensed two crypto exchanges.

5. Singapore

Singapore is another country where residents don't have to pay capital gains tax on crypto profits. It also has a pretty strong regulatory framework, which is a positive or negative depending on what you're looking for. Coincub rated Singapore as the top global economy for crypto in Q4 2021, calling it the "most promising location for crypto investors to live and work."

The blot on Singapore's crypto credentials is that only a couple of international cryptocurrency exchanges have managed to qualify for the country's crypto license. According to Bloomberg, over 170 firms applied, but so far only four have received a license, and 100 have withdrawn or been rejected. Japan has given licenses to 30 firms, and also ranks highly among Asian countries that might appeal to crypto investors.

What about Bitcoin mining?

Bitcoin miners are starting to feel like unwelcome guests at the party. After China cracked down on crypto, many miners were forced to find new homes. Several countries, such as Kazakhstan and Kosovo, initially welcomed them with open arms. Unfortunately, mounting issues over energy shortages mean those countries no longer want these energy-intensive companies operating inside their borders.

Some Bitcoin miners have relocated to the U.S., setting up in New York, Kentucky, Georgia, and Texas. Observers point out that many of these firms are using renewable energy, which could reduce Bitcoin's carbon footprint. However, there are also reports that crypto miners are reopening coal plants to power their activities.

For crypto enthusiasts, there are many different factors to weigh in choosing the ideal location. Sadly, given how quickly crypto regulation can change, attempts to live in the most crypto-friendly place could result in a very nomadic existence.