Another year is coming to a close, so it's time to take stock and look back on the year in Bitcoin in New Zealand in 2024. In this article we'll summarize the highlights and happenings in the Bitcoin scene in 2024, provide a snapshot of the regulatory and political scene and share some thoughts about what will happen next year.

Globally, this felt like a real year of important groundwork being laid and Bitcoiners around the world are daring to dream that this is the start of "hyper-bitcoinization". So how has that felt from New Zealand?Let's dive in and find out.

We'll start with the shining light on the Bitcoin scene in NZ, the community. As we explain to overseas Bitcoiners when they visit, there really is a "national Bitcoin scene" in New Zealand and it's not that hard to meet and get to know Bitcoiners from all over the country. We're all in the same time zone, travel times are short and all the events are open and welcoming.

If there is a heart of the Kiwi Bitcoin community, this is it. Bitkiwi has gone from strength to strength in 2024 with events in Queenstown (fast becoming the main event of the year), Wellington (the halving party) and Christchurch. Bitkiwi events are always free to anyone, relaxed and fun. You can buy beer and books with sats and meet other Kiwi bitcoiners. This year we had speakers, panel discussions and even a live feed with Melbourne bitcoiners for the halving party in April.

We even had our own live performance from TipNZ at Bitkiwi VIII in Queenstown!

In 2025, Bitkiwi will be on again in Queenstown (March), Auckland (July) and Wellington (October).

There are now regular meetups in Auckland, Wellington, Christchurch and Queenstown. Other meetups and events are on in other places too, connect with Bitcoiners on X or Nostr to find one near you.

A year on from our review of the Bitcoin scene in New Zealand in 2023, how is adoption looking now?

Finding the exact number of people that hold bitcoin is difficult as it's a decentralized open protocol with no central authority running everything, so the best we can do is estimates. In mid 2024 a survey, New Zealand shitcoin casino Easy Crypto commissioned a survey which gives a good insight into the "crypto" adoption in New Zealand. The survey found that 14% of New Zealanders either own or are considering buying "crypto" assets. The number of people considering purchasing "crypto" is around 45%. This is a similar number to the figure we reported last year.

The IRD (New Zealand's tax department) have identified 227,000 people as having made crypto trades on exchanges and one New Zealand exchange disclosed they have 250,000 customers.

From an overall population of 5 million people, this is fairly low uptake and these numbers lump bitcoin and "crypto" in together, which we all know is not accurate. So this represents a similar level of ownership to last year.

The launch of the Bitcoin ETFs in 2024 will make bitcoin exposure easier to New Zealanders as it's now possible for individuals to invest directly and Kiwisaver providers can now include ETSs in their fund. As of 2024 there was only one Kiwisaver provider who has included exposure to the Bitcoin ETFs in their fund and it is worth noting that had gains of 116% this year.
Source: Morningstar KiwiSaver Survey September 2024

This fund (Koura) recently made the decision to only hold bitcoin in their "crypto" fund, and even change the name of the fund from "Koura Carbon Neutral Crypto Fund" to "Koura Bitcoin Fund".

For this metric, we used the proxy of BTCmap.org. In our 2023 review (written in October) there were 30 merchants in New Zealand on the map. This year 47 merchants are listed, a healthy increase. The South Island has 30 merchants and the North Island 17, an interesting mix considering the population differences.

It's still early but community members regularly hear from merchants who are interested in accepting bitcoin, with community members doing the hard yards to help merchants and get them set up. The number of merchants accepting bitcoin in Queenstown has shown a good increase, and there was great work in Auckland getting a pharmacy from a national chain on board.

Here's a comparison of other locations around the world with similar populations, from 2023 to 2024.

Globally, it's still places like El Salvador and Lugano with the most merchant adoption. But it's worth noting rising merchant adoption in Africa and like last year, the Isle of Man punches way above its weight with 42 merchants for a population of 84,000. On a per capita basis, Lugano in Switzerland leads the way with 267 merchants for a population of 67,000.
Source: btcmap.org

In terms of financial services for bitcoiners in New Zealand, 2024 was a breakout year with the launch of Lightning Pay, a Kiwi owned and operated business offering the quickest and easiest way to convert NZD into bitcoin and for merchants to accept bitcoin.

For purchases Lightning Pay offers an API connection to your NZ bank account, making the transfer of NZD seamless, fast and cheap. They also support withdrawals on the Lightning network, meaning receiving your bitcoin is fast and at the lowest possible fee rate. Lightning Pay offers competitive rates and low fees, so it's a real change in the marketplace for Kiwis.

Lightning Pay also offers merchant services, allowing businesses to accept bitcoin payments at zero fees. This is the ultimate use case for bitcoin and lightning, getting rid of the legacy merchants and card fees charged by credit card companies and payment providers.

With an abundance of hydro power, New Zealand could adopt bitcoin mining and be a global leader. We also have one of the leading global voices on sustainable Bitcoin mining in Daniel Batten.

Many people are surprised to hear that bitcoin mining using renewable electricity happens in New Zealand, with South Island company Gridshare partnering with Pioneer energy at Lake Monowai in Southland. Gridshare is the leading New Zealand bitcoin mining company, based in the South Island and uses 100% renewable energy for their data centres.

Bitcoin mining is a global industry and Gridshare is partnering with C4 Capital (Daniel Batten's firm) to mine bitcoin at landfills in South America. This is an under reported but extremely strong case for bitcoin mining - bitcoin miners located at landfills can mitigate the most polluting greenhouse gas of all, methane, while providing additional revenue to the landfill owner.

Featured in last year's article as one of the prominent Kiwi voices on the global Bitcoin stage, in 2024 Daniel Batten has continued to educate, challenge and engage media and the public about sustainable Bitcoin mining. His approach is data and research backed, it's very compelling and the way he communicates new ideas to critics is refreshing and polite. If there's one voice that Kiwis should listen to about Bitcoin mining, it's Daniel’s.

The case Daniel makes in this talk is very compelling. The Bitcoin mining network is already using over 50% renewable energy and it would only take 35 more landfill mining sites to make the entire Bitcoin network a net reducer of atmospheric CO2.

Independent outlets and media lead the way on Bitcoin coverage in New Zealand, although in 2024 we have started seeing more coverage of Bitcoin in mainstream outlets too.

This is Kiwi Bitcoiner Cody Ellingham's podcast, now into its third year and over 100 episodes he's become the voice of Bitcoin in New Zealand. Cody will go deep with a wide range of guests such as international figures like Samson Mow, Allen Farrington and Max Hillebrand, ex Reserve Bank Governor Don Brash and of course many Kiwi Bitcoiners and personalities.

While not strictly a Bitcoin podcast, host Darcy Ungaro is obviously a believer in Bitcoin and has been talking about how to introduce Bitcoin into your own investment mix for years. We love the fact Darcy puts it out there but just wonder how much his message is watered down by his mostly traditional client base and "crypto" sponsors. But he's doing the work and getting the message to new people so well done Darcy.

Also not a Bitcoin podcast, but definitely a new media channel with the balls to cover topics such as Bitcoin. A scroll through the episodes reveals a range of topics that would make your regular TVNZ & RNZ listener clutch their pearls in anguish. In a recent interview with Kiwi Bitcoin James Viggiano I was impressed with host Dieuwe de Boer's knowledge and understanding of Bitcoin as they discussed the opportunities Bitcoin represents for New Zealand. He's obviously done some work and understands the problems Bitcoin can solve.

One takeaway from me from this discussion was the framing of Bitcoin mining as an export opportunity. As an open global network anyone can participate in Bitcoin mining. All the Bitcoin currently bought by Kiwis is essentially imported and paid for with USD, what if we flipped that and started using our own energy resources to mine bitcoin and get paid foreign exchange (or bitcoin!) to do so.

In terms of introducing Bitcoin to mainstream media in NZ in 2024, the award has to go to Madison Reidy. She has obviously done some research and has introduced the topic of Bitcoin this year on her "Markets with Madison" programme on the legacy mainstream media channel of the New Zealand Herald

It was Madison's interview with Michael Saylor which he made the quip heard around the Bitcoin world about over zealous "crypto anarchists" insisting to hold their own keys. The Saylor interview was interesting for sure, but in terms of new people trying to find out more about Bitcoin, it just came across as a whole lot of financial engineering that would go over the heads of many regular people.

The first interview she did with a well known Bitcoiner was late in 2023 with Larry Lepard, which I would actually recommend as a first take for NZ investors trying to understand how Bitcoin fits into the investment world.

Full credit to Madison for doing the work and getting the Bitcoin message out to Kiwis. She sounds like a Bitcoiner and I've never heard her talk like a shitcoin apologist, although she started getting close in the Saylor interview when he started talking about the tokenization of assets. She even got Reserve Bank Governor Adrian Orr to bring up Bitcoin in an interview without mentioning it herself which was funny.

While we're talking about Adrian (full steam ahead) Orr, he wins the raspberry award for getting in the spotlight for all the wrong reasons. During a presentation to the Parliamentary Select Committee in February, Mr Orr made the comment "It’s a great business to be in central banking. You print money and people believe it. Touch wood,”, to which the whole room laughed. This comment went around the Bitcoin world and reminded all of us that the ruling class do not share the same realities as most people, or even understand us.

If Mr Orr is the clown of the year, let us introduce you to the Queen, Tip_NZ! She's our own "Post Fiat Poet - Exploring the Bitcoin universe with visual storytelling, sick beats & profound lyrics". Tip has taken global Bitcoin stages by storm in the last few years and her smiling face regularly brightens the room at Bitkiwi and Auckland meetups. She even gave us a live performance of "Dawn" at Bitkiwi VIII in Queenstown.

If you're a Bitcoiner in New Zealand and talk to regular people in your life you are still likely to be met with the usual replies that the uninformed mass media patrons will offer you. But one thing everyone agrees on are the problems that need solving. What is happening in New Zealand on a wider scale that Bitcoin can help with?

In a recent interview with Preston Pysh, James Check described the Australian house market as the most unaffordable in the world. Everything he explained applies equally to the New Zealand housing market. If you want one concrete example of how the fiat system is failing then just look at the median house price vs median household income in New Zealand.

Whichever metric you use, housing is already unaffordable for working people in New Zealand. In 2024 the median house price is just under 7 times median household income, anything over 3 times is considered unaffordable. It never used to be this way and doesn't have to.
Source: https://www.interest.co.nz/property/house-price-income-multiples

If Bitcoin is your unit of account, houses are actually getting more affordable, take a look for yourself.

The 2024 NZD bitcoin price is taken from 31 Oct 2024, the last date for which median house prices were available.

The takeaway here is clear - the NZD is losing purchasing power in the housing market but Bitcoin is not. If you're saving in bitcoin and using that as your unit of account, houses are becoming more affordable.

Kiwis choose real estate as the most common form of store of value. Imagine how much more affordable housing would be if housing was just required for its utility value, not as a proxy store of value because our base money won't do the job.

The Consumer Price Index is calculated every 3 months, with the most recent index in September 2024 showing a 2.2% increase, down from the 6-7% levels of 2021 - 2023. But is life more affordable for most Kiwis? What do you think, what do you see in your life?
Source: CPI figures on NZ Stats

Rates, insurance, healthcare and nutritious food all seem to be increasing way more than 2% to me.

Why do we need inflation anyway? That's another rabbit hole but consider this - at 2% inflation your money loses half its purchasing power in 36 years, at 3% inflation (the higher end of the RBNZ target) you lose half your purchasing power in 24 years. If we meet the official target inflation rate of the RBNZ this will ensure half of our purchasing power is eroded, so tell me again, why do we need inflation?

And remember, CPI only includes a basket of arbitrarily determined goods and services. But we all live different lives, CPI cannot capture the goods and services different kinds of people need. If you're a university student, a family with young children, empty nesters or a retiree living in a retirement village the goods and services you require are very different. There's no way one single number calculated from an arbitrary selection of goods and services can be accurate for everyone.

As with housing, when you start looking at prices in Bitcoin terms, that supermarket bill and fuel for the car gets more affordable, not less.

After looking at housing and consumer price inflation, let's look at monetary inflation. What is this? It's how much the overall supply of money in the economy increases, i.e. how many NZD are floating around chasing goods.

The more money there is, the more prices go up, its basic supply and demand. As the NZD is not backed by gold (or anything else) the quantity is not fixed and the more dollars issued by the RBNZ (as happened during Covid) and through lending by banks (as happens all the time), there's more money in the economy so prices will go up.

Here's an interesting fact, since 1988 NZD base money (NZD notes & coins and commercial bank deposits with the RBNZ) has increased on average by 16% each year. This doesn't include the additional NZD issued by banks through lending, just the base money issued or held by the RBNZ. Another way of looking at this is that the supply of NZD has doubled every 5 years since 1988.
Source: Porkopolis Economics - Global Monetary Assets

That's why your dollars lose purchasing power every year, they're making more of them. It makes you think about why property goes up every year, in fact the amount of money supply increases over time matches really tightly to house price increases.

Bitcoin is neutral money with a fixed supply and this is enforced by tens of thousands of bitcoin nodes around the world. Nobody can issue more bitcoin, the supply cap of 21 million bitcoin is baked into the code and protected by the world's largest and most powerful computer network.

Government spending and debt are increasing significantly. In September 2024, our government debt was USD$99 billion (42.5% of GDP), an increase of $67 billion in just five years. The government deficit was USD$7.3 billion, $1 billion more than budgeted and the fifth year in a row the government is spending more than it takes in.

A top line comparison to the figures from 2023 show that government debt has increased a lot, USD$11.3 billion in the last year.

Sources:
Statement from the NZ Finance minister
NZ government debt figures in USD on CEIC data
NZ government financial statements on the NZ Treasury website

In our 2023 review, we reported that a parliamentary committee was reviewing the regulatory landscape for Bitcoin and other crypto currencies, with a view that new innovations in money would require a new approach to regulation. One year on from this and there has not been a lot of progress, a report has been presented and passed to parliament, the only response was an acknowledgement of the report and noted recommendations.

The government issued a response in March. It was a general document, with an acknowledgement of the opportunities that exist with digital assets, recognition of the recommendations made and a statement that more work is required and prod for more work and a statement that New Zealand is following similar regulatory approaches to Australia and the UK.
Read the full response here.

More broader work on the future of money and development of a Central Bank Digital Currency (CBDC) is underway through the Reserve Bank of New Zealand. There are no dates visible on the RBNZ's website explaining the next steps, although in public they have committed to being transparent and offering the public multiple opportunities for feedback.

So it really seems like we're in a holding pattern in terms of regulation and any political leadership on Bitcoin. The USA is now considering a Strategic Bitcoin Reserve and this is proving to be a catalyst for other countries to consider their approaches. New Zealand will have to make some decisions soon on how we will adopt our economy and financial system to Bitcoin.

Politicians all over the world are openly talking about Bitcoin and their strategies to it, but here in New Zealand the silence is still deafening. It's up to us to let them know it matters and it matters now.

One new regulatory development in 2024 was the implementation of OFAC’s “travel rule”, which means that Virtual Asset Service Providers (someone like Lightning Pay) is required to record details and parties of transactions if other Virtual Asset Service Providers outside of New Zealand are involved.

Part of this requirement is that all transactions over NZD$1,000 must be submitted to the New Zealand Police Financial Intelligence Unit. If the parties are within New Zealand or for transfers to self hosted wallets then this requirement does not apply.

An initiative to provide all members of New Zealand's Parliament with copies of the Bitcoin Standard or the Progressive Case for Bitcoin. Fundraising is complete and the books have been ordered, Simon Collins from Stackr and Lightning Pay is running this project.

Another community initiative aimed at helping merchants in New Zealand accept Bitcoin. With the scene still nascent and Kiwis being the friendly folks we are, we even do house calls!

Almost forgot, I'm putting the final touches on this draft the day bitcoin cracked USD$100,000 for the very first time, which translates to approximately NZD$175,000 per bitcoin. On 1 January 2024, 1 BTC was just under NZD$67,000, meaning the NZD has lost more than 250% of its purchasing power against bitcoin.

This is pretty alarming, if you still haven't realized how weak the NZD is against a hard currency or asset you need to figure it out because it will affect you, then work out how you're going to deal with it because this is your purchasing power going down the drain.

It seems very clear that 2025 will be a watershed year for Bitcoin globally. All through 2024 the scene has been set, from the launch of the Bitcoin ETFs in January to the US election in November. December could bring even more developments, with Microsoft voting on whether to invest in Bitcoin or not at their shareholder's meeting.

Bitcoin is here on the global stage, it's a USD 2 Trillion asset, a neutral, open, rules based digital monetary network outside the control of any one person, company or government. It's the future of money and every single one of us, from individuals to nation states need to work out how to engage with it.

New Zealand has the same opportunity as any other country in front of us right now, we can open our economy and markets to Bitcoin or continue to use an inefficient and outdated monetary system which has inflation built in at the core which hurts all of us.

It's on us now.