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Abstract
In recent years, cryptocurrencies have transitioned from experimental assets, traded in the dark corners of the internet, to widespread investment alternatives found in the portfolios of everyday investors. This paper investigates the extent of cryptocurrency investment in Norway and identifies who owns these cryptocurrencies. First, we use Norwegian tax records to investigate the cryptocurrency portfolios reported for tax purposes. All Norwegian taxpayers are obliged to report the market value of their cryptocurrency at
year-end. The tax records reveal that almost 1 percent of Norwegian taxpayers declare owning cryptocurrencies. They also let us map out cryptocurrency ownership across the income, wealth, and age distribution in Norway. We show that, although distinctly younger, cryptocurrency owners are similar to owners of other kinds of assets in terms of wealth. Nonetheless, as cryptocurrencies are self-reported, the figures observed in tax returns are likely under-reported. In the second part of the paper, we attempt to account for this by merging tax record abstracts of all Norwegian taxpayers in 2021 with the list of depositors on the cryptocurrency platform Celsius as of April 2022. Less than half of the Norwegian taxpayers with a Celsius account reported any cryptocurrency wealth to the tax administration three months prior.
Keywords: Tax evasion, Cryptocurrency, Inequality
JEL codes: H24, D31