On Portugal’s Bitcoin Beach, Crypto Optimism Still Reigns

LAGOS, Portugal – The Bam Bam Beach Bitcoin bar on a uncrowded beach in southwestern Portugal is the meeting point. To get there, you pass a boat harbor, seaside hotels and apartment buildings, then park near a sleepy seafood restaurant and walk along a wooden path that crosses a sand dune. Yellow Bitcoin flags blow in the wind. Conversations about cryptocurrencies and a decentralized future flow.

“People always doubt when to buy, when to sell,” said Didi Taihuttu, a Dutch investor who moved to the city this summer and is one of the owners of Bam Bam. “We solved that by being all in.”

Sitting on the sand nearby, another bar regular, Katherin Bestandig, said, “Anything is possible if we are brave.”

The bar and community of about 150 crypto supporters around Lagos City are a bubble of optimism in the midst of what has become known as the “crypto winter.” This summer, cryptocurrencies like Bitcoin and Ether melted down, and crypto companies like experimental bank Celsius Network declared bankruptcy as fears about the global economy drove down the values of risky assets. Thousands of investors were hurt by the crash. The price of Bitcoin, which peaked at over $68,000 last year, is still down more than 70 percent.

But in this Portuguese seaside idyll, confidence in cryptocurrencies is unaffected. Every Friday, about 20 visitors from Europe and beyond gather at Bam Bam to share their unwavering faith in digital currencies. Their buoyancy and joy endures in Portugal and other crypto centers around the world, such as Puerto Rico and Cyprus.

“We haven’t sold,” said Paulo Estevão, a crypto trader, over lunch at a restaurant in the Portuguese beach town of Ericeira, where he meets weekly with three other friends who invest in cryptocurrencies. He said his crypto holdings were about 80 percent below the peak, but added, “I’m investing more.”

In Europe, Portugal has stood out as one of the biggest hubs for crypto investors and enthusiasts. Many crypto supporters have flocked to the country because the government does not tax profits made from virtual currencies, unlike Italy and France. It helps that the climate is beautiful, the cost of living is low, and there is an easy path to residency. Vanguard Properties, a real estate company in Portugal, said it had sold at least 10 luxury homes to “crypto families” since last year. (The sales were previously reported by Sifted.eu.)

In beach towns like Ericeira and Lagos, stores and restaurants are showing their acceptance of digital currencies, taking Bitcoin as payment. Lisbon, the capital, has become a hub for crypto-related startups such as Utrust, a cryptocurrency payment platform, and Immunefi, a company that identifies security vulnerabilities in decentralized networks.

“Portugal should be the Silicon Valley of Bitcoin,” said Mr. Taihuttu. “It has all the ingredients.”

However, the Portuguese government may throw a wrench into the country’s status as a crypto center. In May, Fernando Medina, the finance minister, said that the government was considering taxing crypto gains as regular income and “intends to legislate on this matter.” A decision could come next month, when Portugal releases its annual budget.

The Ministry of Finance declined to comment on their plans. For now, Portugal remains popular with optimists and amateur traders trying to use their crypto investments to travel and live without a traditional job. Using money earned when digital currency values skyrocketed in recent years, this group has made Portugal a base.

Many in Lagos, inspired by Mr. Taihuttu, 44, have made their way to the Bam Bam bar. In 2017, he sold almost all of his belongings in the Netherlands to invest in Bitcoin. At the time, the price of a single Bitcoin was about $900, compared to about $19,000 today. With his wife and three daughters, who have received no formal schooling since 2017, he then traveled to 40 countries, chronicling each step on social media. They called themselves “the Bitcoin Family.”

While the news media covered his family’s story, Mr. Taihuttu’s media followed his growth, turning him into an influencer and a source of investment advice. A documentary crew has followed him for the past 18 months. This summer, he settled in Portugal and quickly became something of an ambassador for his crypto scene.

He has goals of turning Meia Praia, the beach where Bam Bam is located, into a “Bitcoin Beach.” He is making property purchases to create a close community for fellow believers.

“It proves that you can run a part of the world, even if it’s just one,” said Mr. Taihuttu, with a Jack Daniel’s and a Coke in his hand. He has shoulder-length black hair and wore a tank top that showed off his tan and tattoos (including one on his forearm of the Bitcoin symbol).

Ms. Bestandig was among those that Mr. Taihuttu designed for Portugal.

Originally from Germany, she said that she and her family had been on the road since 2020. They had made enough from investing in Ether and other cryptocurrencies over the past few years to pay for their travels, she said.

The value of Ether has dropped by about 60% in the last year, which Ms. Bestandig said was painful. She has cut back on food and lodging costs, but remains committed to investing in cryptocurrencies and said her family had enough money to continue their current lifestyle.

“We sold our house, our cars, our everything,” she said. “We’re trying to connect with other crypto-minded people.”

Almost everyone on Bam Bam has had a history of being scammed or losing money in events like the collapse of Mt. Gox, a Tokyo-based virtual exchange that declared bankruptcy in 2014 after huge and inexplicable Bitcoin losses.

If cryptocurrency prices don’t recover, “a lot of them will have to go back to work again,” Clinton Donnelly, an American tax attorney specializing in cryptocurrencies, said of some of those who gathered in Bam Bam.

Even so, Mr. Donnelly and other regular lawyers said that their belief in cryptocurrency remained unwavering.

Thomas Roessler, wearing a black Bitcoin shirt and drinking a beer “inspired” by the currency, said he had come with his wife and two young children to decide whether to move from Germany to Portugal. He first invested in Bitcoin in 2014 and more recently sold a small rented apartment in Germany to invest even more.

Mr. Roessler was concerned about the drop in crypto values, but said he was convinced the market would recover. Moving to Portugal could lower his taxes and give his family the opportunity to buy affordable property in a warm climate, he said. They had come to the bar to learn from others who had made the move.

“We don’t know many people who live this way,” said Mr. Roessler. Then he bought another round of drinks and paid for them with Bitcoin.

Article originally published in The New York Times.