It was only a matter of time. Forbes magazine, which tracks and produces annual rankings of the world’s wealthiest people, has come out with its first list of cryptocurrency billionaires.
The list comprises a wide array of players within the cryptocurrency ecosystem. Developers and founders of trading exchanges, which oil the wheels of the crypto ecosystem, are members of the list as are big-name investors and financiers.
It is reflective of the secretive and opaque world of cryptocurrencies. Only a couple of names listed in the rankings have discussed or disclosed their actual holding amounts of virtual currencies.
This is a problem since there are no public filings, similar to the SEC disclosures, available for Forbes to confirm its figures. As a result, the magazine’s wealth estimates for individuals sometimes span a broad range.
The rankings are also indicative of the relatively nascent nature of the industry and includes individuals who founded companies and coins less than a year ago, but are considered billionaires today based on market valuations and trading volumes.
The Wealthiest People In Cryptocurrencies
Chris Larsen, co-founder of Ripple, was ranked as the wealthiest man in cryptocurrencies with an estimated net worth of $7.5 billion to $8 billion. A majority of his wealth is tied up in XRP, Ripple’s cryptocurrency. Larsen is estimated to hold 5.19 billion XRP and became one of the world’s richest men, ahead of Facebook Inc. (FB) founder Mark Zuckerberg, when XRP’s price surged at the end of 2017.
Ethereum co-founder Joseph Lubin takes the second spot with a net worth of $1 billion to $5 billion. Changpeng Zhao, the Tokyo-based founder of Binance – the hottest new exchange in town, is ranked third, with wealth estimated between $1.1 billion and $2 billion. Binance was launched in July 2017 and has already racked up 6 million users and $7.5 million in commission fees.
Cameron and Tyler Winklevoss, who recently became the first known billionaires in bitcoin, and Matthew Mellon, heir to the banking dynasty, rounded out the top five, with an estimated net worth of $900 million to $1 billion.
Forbes 2018 List of the Crypto Richest:
- Chris Larsen, Co-founder of Ripple: $7.5 to $8 billion
- Joseph Lubin, Co-founder of Ethereum: $1 billion to $1.5 billion
- Changpeng Zhao, CEO of Binance: $1.1 billion to $2 billion
- Cameron and Tyler Winklevoss, Co-founders of Gemini: $900 million to $1.1 billion
- Matthew Mellon, Individual investor: $900 million to $1 billion
- Brian Armstrong, CEO of Coinbase: $900 million to $1 billion
- Matthew Roszak, Co-founder of Bloq: $900 million to $1 billion
- Anthony Di Iorio, Co-founder of Ethereum: $750 million to $1 billion
- Brock Pierce, Chairman of Bitcoin Foundation: $700 million to $1 billion
- Michael Novogratz, CEO of Galaxy Digital: $700 million to $1 billion
- Brendan Blumer, CEO of Block.one: $600 million to $700 million
- Dan Larimer, CTO in Block.one: $600 million to $700 million
- Valery Vavilov, CEO of Bitfury: $500 million to $700 million
- Charles Hoskinson, Co-founder of Ethereum and IOHK (Cardano): $500 million to $600 million
- Brad Garlinghouse, CEO of Ripple: $400 million to $500 million
- Barry Silbert, CEO of Digital Currency Group: $400 million to $500 million
- Vitalik Buterin, Creator of Ethereum: $400 million to $500 million
An Unequal Industry
The rise of cryptocurrency millionaires has been rapid and impressive. But it hides the fact that the industry rewards unequally. Investors have swooped in to profit from the hard work of developers.
As Nathaniel Popper from the New York Times points out, prominent developers have not made much money. For example, Ripple’s Jed McCaleb does not seem to have benefited from its cryptocurrency’s price increase as much as its investors and CEOs.
Similarly 24-year-old Vitalik Buterin, who developed the ethereum smart contract platform, is ranked a distant 17th, well below his other co-founders Lubin and Anthony Di-Loro, an early investor in the platform.
Finally, there’s bitcoin itself. Most of its phenomenal price gains in the last year have accrued as wealth to select holders of the coin, such as the Winklevoss twins. (See also: Winklevoss Twins Are Bitcoin’s First Billionaires). According to information from bitcoinprivacy.info (cited by London-based research consultancy Capital Economics), just 5,500 addresses hold one-half of the current stock of bitcoin. Each of these addresses contains at least $5 million (based on bitcoin’s prices at that time), the firm stated in a January newsletter.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin.