Bitcoin millionaires are moving to Puerto Rico for lower taxes and island living

In March 2021, crypto entrepreneur and investor David Johnston moved his parents, wife, three daughters, and company with him to Puerto Rico. The 36-year-old, who has been involved in the crypto ecosystem since 2012, says the decision to relocate from Austin was kind of a no-brainer.

Beyond the fact that Puerto Rico offers a year-round tropical backdrop with picturesque beaches, the U.S. territory also has crypto-friendly policies, including huge tax breaks to those who spend at least 183 days on the island each year. Residents can keep ahold of their American passports while at the same time not having to pay any taxes on capital gains. It certainly helped seal the deal for Johnston, though for him, the bigger incentive was an overwhelming fear of missing out.

“That’s where all my friends are. I don’t have one friend left in New York, and maybe the pandemic accelerated this, but every single one of them has moved to Puerto Rico,” he said, noting that many of his California friends have also made the move.

Johnston tells CNBC that after seeing his friends and colleagues decamp, he went to check it out himself in early 2021.

“I said, ‘Wow, okay, I get it,’” Johnston recalled of his first impression of the small island territory, whose circumference can be driven in half a day. “The island has three million people…This is big enough to build a tech center.”

Johnston says that Puerto Rico reminds him a lot of Austin in 2012. Back before Tesla, Samsung, and Apple helped turn the Texas capital into one of the country’s hottest tech hubs, he says the city felt small. But similar to Puerto Rico today, Austin had a great energy and lots of passionate people moving there, which accelerated over time. So for Johnston, making the move to Puerto Rico feels a whole lot like getting in on the ground floor.

“That’s where my community is. That’s where the people I know and love are going, and they’re going there to build something cool. Something that helps everyday people, and that’s what I love about open source. That’s what I love about blockchain. It’s open to everybody,” he said.