Around 80% of Bitcoin Investors Lost Money in 2020, Says New Report

Around 80 percent of global investors suffered losses owing to market pressure amid the collapse of the crypto exchange, revealed a new study. The research was carried out by the International Bank of Settlements in collaboration with IntoTheBlock and BlockCompare to analyse digital currencies, especially Bitcoin in the crypto markets.

It further revealed that more than 73 percent of users downloaded crypto apps when the Bitcoin prices were hovering above $20,000 in October 2022.

These investors, who invested in Bitcoin on the day of the download of such applications, incurred a loss on their initial investment. This resulted in an average estimate of global investors who experienced unrealised losses in the long term. The price of Bitcoin took a steep plunge after the FTX meltdown and reached $16,000.The analysis of blockchain data conducted by IntoTheBlock and BlockCompare finds a proportionality between the high price of Bitcoin and the small investors making their debut in the market.

It was observed that as prices rose, smaller investors entered the Bitcoin market. On the other hand, the largest holders also referred to as whales or humpbacks were selling a return at the expense of smaller users. The study also examined the trends in Bitcoin prices from 2015-2022 and the factors that led to its adoption across age groups and demographics in around 95 countries in seven years. The report stated, “Overall, back-of-the-envelope calculations suggest that around three-quarters of investors have lost money on their bitcoin investments.”

During the period under review by the report, the cost of Bitcoin rose to a peak at nearly $69,000 in November 2021 from $250 in August 2015. Moreover, the number of investors using crypto apps to purchase and sell cryptocurrencies increased to 32.5 million from 119,000 during the designated period.

The study assumes that every investor bought $100 of Bitcoin in the month of the first app download and each subsequent month. The median investor predictably has lost $431, corresponding to 48 percent of their total $900 in funds invested.

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