Nearly 80 percent of global investors suffered losses due to market pressure amid the collapse of crypto exchanges, a new study revealed. The research was conducted by the International Bank of Settlements in collaboration with IntoTheBlock and BlockCompare to analyze digital currencies in the crypto markets, specifically bitcoin.
It further revealed that more than 73 percent of users downloaded crypto apps in October 2022 when bitcoin prices were rising above $20,000.
These investors who invested in bitcoins on the day of download of such applications suffered losses on their initial investments. This resulted in an average estimation of global investors, who experienced unrealistic losses over the long term. After the FTX meltdown, there was a huge drop in bitcoin price and it reached $16,000. An analysis of blockchain data by IntoTheBlock and BlockCompare reveals a correlation between the high price of bitcoin and small investors making their debut in the market.
It was observed that small investors entered the bitcoin market as soon as the price increased. On the other hand, the largest holders, also known as whales or humpbacks, were selling returns at the expense of smaller users. The study also examined bitcoin price trends from 2015-2022 and factors driving its adoption across age groups and demographics in approximately 95 countries over seven years. “Overall, back-of-the-envelope calculations suggest that nearly three-quarters of investors have lost money on their bitcoin investments,” the report said.
During the period under review by the report, the cost of bitcoin shot up from $250 in August 2015 to nearly $69,000 in November 2021. specified period.
The study assumes that each investor bought $100 of bitcoin in the month of the first app download and in each subsequent month. The median investor lost an estimated $431, which is 48 percent of their total $900 in invested funds.
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