Crypto bros descend on ‘Silicon Bali’

With its ocean views and beach resorts, Bali has long attracted surfers and holiday goers. Today, it is also a premier destination for the world’s crypto enthusiasts.

Among the recent arrivals is 33-year-old Russian blockchain entrepreneur Ilia Maksimenka, who came to the Indonesian island in 2020, not long after the outbreak of Covid-19.

“It’s very easy to meet the right people,” he said. “In terms of south-east Asia, Bali is like the [international] hub of crypto now.”

While the pandemic has curbed international tourism, the rise of homeworking has also prompted many people to reconsider how comfortable they are living in the cities that have traditionally been business hubs. For Maksimenka, who comes from Moscow, Bali was an exotic alternative.

“When you come to Bali, you have maybe a 10 times cheaper life than in California. But you have the same comfort level and much higher quality of food. People prefer to come here and live the tropical life,” he said.

In Bali’s community of expats, who like to describe themselves as “digital nomads”, crypto is a common interest. On social media, many boast of the fortunes they have made trading cryptocurrencies in sunlit villas, while friends scrape by in cramped apartments back home.

“[We’re] working in [these] hippy places. And you start seeing Lamborghinis,” said Emilio Canessa, an Italian who works in marketing for the internet computer, a project of blockchain business Dfinity. “The calibre of the people here . . . It’s crazy.”

“They have started calling this place Silicon Bali,” he added.

Tokocrypto, an Indonesian crypto exchange, says it now has 37,660 users registered in Bali, compared to just 808 at the start of 2021. People in Bali’s crypto community that the Financial Times spoke to had diverse interests, including cryptocurrency trading, non fungible tokens, the metaverse and decentralised finance. But most of the recent arrivals fit a particular mould.

“It’s very heavy on males. White males, people in their early twenties,” said Antria Dwi Lestari, who works in community engagement for Tokocrypto in Bali.

As more of these young men from around the world flock to Bali in search of the crypto dream, businesses have spotted an opportunity. This year, Tokocrypto launched T-Hub, a “crypto clubhouse” in Bali with a co-working space and swimming pool. Indodax, another Indonesian crypto exchange, has its second office on the island. Canessa has suggested his company establish a “community-focused, cultural presence”.

At the same time, other businesses in Bali are struggling. As much as 80 per cent of the island’s economy relies on tourism, a revenue stream that was all but cut off during the pandemic.

The influx of crypto migrants will not make up for this lost income. Just 51 tourists visited the island last year, according to Bali’s statistics office, compared to more than 6mn annually before the pandemic. Some parts of the island were all but emptied out.

Those in the crypto community are not blind to the local businesses struggling around them. Last year, an anonymous group launched Bali Token, a crypto token. According to its website, it can be used as a “discount voucher” at “any tourism spot in Bali”, helping “million[s] of Balinese . . . to stay strong during Covid-19”. The token’s value has plunged nearly 100 per cent since its peak in January, according to data provider CoinMarketCap.

Separately, an online petition called on the Indonesian government to create a “remote worker visa” to boost the “digital and creative economy” as Bali struggled with the tourism drought. It has been signed by 3,416 people since it was launched two years ago.

The petition says that without a specialised permit, remote workers in places like Bali often have an ambiguous legal status.

Maksimenka suggested a lot of social media posts about Bali should be treated with scepticism.

“Most of these golden kids who tried to show their riches [on social media], they are usually scam people,” he said. Only about 10 per cent of Bali’s crypto community are “serious about the technology”, he added, while the rest are “just jumping on the hype” and trying to make money.

Mega Septiandara, an Indonesian who works remotely for an investment firm from Bali, also suggested every expat is not on the island for the long haul.

“I have a job and that’s how I keep alive. Crypto is nice. I have a nice side income from it,” she said.

But others “are trying to make their fortune”, she added. “Some are struggling a bit and decided to go back to their home country. [They] maybe find it a bit boring in Bali. After a while it’s just: ‘Oh, it’s the beach.’”