Crazy Rich Crypto

The wedding scene from "Crazy Rich Asians." Wealth preservation is a key theme among Asia's moneyed aristocracy and marriage is one way to strengthen alliances.
The wedding scene from “Crazy Rich Asians.” Wealth preservation is a key theme among Asia’s moneyed aristocracy and marriage is one way to strengthen alliances.

Singapore, SINGAPORE – If you haven’t caught Hollywood’s hottest romantic comedy set in Singapore, Crazy Rich Asians (and seriously if you haven’t, which rock have you been hiding under?), then be forewarned, there are some spoilers in here. But the purpose of this piece is not to analyze the first all-Asian big budget Hollywood studio movie since Joy Luck Club, it’s to point to the subtle clues as to the drivers which have propelled a generation of Asians into wealth, power and prestige beyond the dreams of avarice and how the coming cryptocurrency revolution will do the same for a privileged few. Set in Singapore, the movie, based on Singaporean-American writer Kevin Kwan’s seminal book of the same name, Crazy Rich Asians, tells the story of how New York University economics professor and American-born Chinese, Rachel Chu follows her boyfriend Nicholas Young from New York to Singapore to attend his best friend’s wedding. Unbeknownst to Rachel, Nick comes from one of the most storied and richest families on the island. The Youngs, who were already rich in China, brought that wealth south to Singapore to expand and grow their fortune and look down their noses on anyone else who does not share a similar pedigree or history. For Singaporeans in the know and for those who have read Kwan’s novels, the names of these elite families are barely disguised – “K C Tang” and “Sugar Kuek” hardly qualify as nom de guerre.

The fictitious Tyersall Park also sits on US$200 million of prime real estate in Singapore, a favorite asset class of Asia's elite families.
The fictitious Tyersall Park also sits on US$200 million of prime real estate in Singapore, a favorite asset class of Asia’s elite families.

But what is interesting in both the movie and the novels, is the source of the wealth of these elite families. It isn’t enough to have made your money in technology, you need to have a “story” to your ascendency in the new aristocratic class and the longer the history the better. Money alone is insufficient, but heritage and pedigree will provide access. And it is here that we find the elite families of Asia have one thing in common as a source and consequence of their wealth – property. In the movie Crazy Rich Asians, the story centers on a fictitious mansion called Tyersall Park which sits on what Rachel’s best friend from college Peik Lin estimates to be abut US$200 million worth of land in Singapore. Kwan’s trilogy delves into even more depth when it comes to the tending for and acquisition of property, as a store of value – it is a class of assets that is unparalleled for the Asian aristocracy. But Crazy Rich Asians collect a lot more than just property, they also collect fine art and jewelry, vintage cars and vinos, which is where cryptocurrencies come in. The rich recognize that true value lies in scarcity and being deflationary assets, cryptocurrencies, helmed by Bitcoin are the definition of scarcity. Be it The Palace of Nine Perfections (the real painting that’s displayed in New York’s Metropolitan Museum of Art and not Kevin Kwan’s fictitious The Palace of Eighteen Perfections) or a 1962 Ferrari 250 GTO, the well-heeled elite crave what others cannot have.

A 1962 Ferrari 250 GTO and yes if you have to ask, you can't afford it.
A 1962 Ferrari 250 GTO and yes, if you have to ask, you can’t afford it.

So it should come as no surprise that in the rarified hallways of family offices managing wealth for generations of Asia’s aristocrats, cryptocurrencies have come up more than once in passing conversation. Whether it’s Bitcoin or its brethren, those in the know are zooming in on what is likely to become the next generation’s breakout asset class. According to one private wealth manager, who manages a US$10 billion family office and who spoke on condition of anonymity,

“It’s basically a land grab. Our clients are asking us about cryptocurrencies all the time. Their children, many of them fourth and fifth generation scions have personally bought crypto or participated in ICOs.”

Among Asia's most elite families, money alone will not buy you access, but pedigree will. Something which is being mirrored in the cryptosphere.
Among Asia’s most elite families, money alone will not buy you access, but pedigree will. Something which is being mirrored in the cryptosphere.

If it is indeed a land grab, many of the most choice plots may have already been spoken for. With the heyday of the initial coin offering (ICO) fever well behind us, many deals for digital tokens to what may one day turn out to be superstar crypto companies are now the exclusive purview of the privileged few. More and more promising blockchain and crypto companies, concerned that the public ICO markets have neither the wherewithal nor the patience to understand their underlying technology are choosing instead to conduct private placements for their ICOs. Just as has been happening for centuries since the invention of the joint stock company on the floors of the Amsterdam stock exchange, private ICO placements are occurring in quiet tables at The Atlas Bar and restaurants like The Black Swan. Private placements in IPOs and ICOs are typically limited to accredited investors, who are almost always well connected and already well-off and by the time most of these companies hit the public market, the insiders have already locked away significant gains, with the public punters left rifling through the scraps.

"So my dear, tell me when did you start mining your first Bitcoin?"
“So my dear, tell me when did you start mining your first Bitcoin?”

There is a well known story in Singapore about how property magnate, the late Ng Teng Fong, an illiterate émigré from China landed on the shores of the island city and made his fortune by snapping up choice plots of land when Singapore was filled with Malay villages, pig farms and rubber plantations – a story echoed by Peik Lin in Crazy Rich Asians as she explains to her friend Rachel,

“These people were buying up land when this place was nothing more than jungle and pig farms.”

As so often happens, art imitates life. Many of the very richest crypto-affluents snapped up cryptocurrencies when they too were nothing more than “jungle and pig farms.” Some poured into Bitcoin and Ethereum, mining them for free or purchasing them for fractions of pennies on the dollar, while others understood the technology and dived into Zilliqa and Binance. To the brave and bold went the rewards. And despite the machinations of the cryptocurrency markets, this cadre of elite crypto-insiders continue to fuel the breakneck pace of growth of companies like cryptocurrency luxury payment gateway Aditus and cryptocurrency hedge funds like Compton Hughes. These companies exist in an exclusive club, hidden away from the limelight and accessible by only the select few. For the new class of crypto aristocrat, there is nothing that their crypto wallets cannot buy. Whether it’s a supercar or a superyacht, a whole cottage industry of companies are emerging to serve the crypto-affluent even to the extent of offering citizenship for crypto. And if you think that companies are only looking to help the crypto elite buy stuff, a whole slew of companies are also catering for the wealth management services that the rich have grown accustomed to. From treasury management to hedge funds, there’s nothing that a crypto whale can’t have at their disposal when it comes to growing their crypto wallets.

"You don't get it Rachel, these people are not just rich, they're crypto rich."
“You don’t get it Rachel, these people are not just rich, they’re crypto rich.”

Just like the Asian aristocracy, this new breed of crypto elite were there from the very beginning. “When did you get started in crypto?” is an oft heard question at many of these exclusive gatherings. “2012? Oh, I was mining in 2010.” But unlike the snobbery in the traditional wealth circles, the camaraderie of these elite crypto communities is very real. For many, they understand the pains of not having others understand the importance of cryptocurrency and the blockchain to the impending technological revolution. Having been there through it all, many are held together by an unspeakable bond that they stayed the course and they have bet big on the blockchain. Many of the original “crypto people” have become overnight millionaires and billionaires and understandably, their newfound wealth has attracted all manner of snake oil salesman and conman, eager to access their private keys and lighten their crypto wallets. Which is why so many of the best events with many of the crypto insiders are exclusive and unannounced and why so many are “by-invite” only. Just like the exclusive parties at Tyersall Park in Crazy Rich Asians, you haven’t truly “arrived” in a crypto sense until you’ve been invited to so-and-so’s dinner or this or that cocktail party. And for good reason, the community is looking to protect its own. Just like the Youngs, the T’sien and the Shangs of Kevin Kwan’s novels, who are insular precisely because great wealth needs to be protected for generations, the crypto elite are insular because they recognize the need to protect themselves and each other, if they are to persist for the generations to come.