Three Out of Four Bitcoin Investors Have Lost Money Since 2015, Study Finds
Nearly three-quarters of people who bought bitcoin lost money according to a survey published Monday as the cryptocurrency sector recovers from a major exchange meltdown that has dented confidence.
Economists at the Bank of International Settlements, an institution widely regarded as the central bank of central banks, analyzed data on investors in cryptocurrencies in 95 countries between 2015 and 2022.
“Overall, back of the envelope calculations suggest that nearly three-quarters of users have lost money on their Bitcoin investments,” they said in their study.
During the period under study, the price of Bitcoin rose from $250 (approx. Rs. 20,000) in August 2015 to a high of around $69,000 (approx. Rs. 56,17,700) in November 2021. It is now trading at around $16,500 (about Rs. 13). ,43,300).
The number of people using smartphone apps that allow one to buy and sell cryptocurrencies increased from 119,000 to 32.5 million during the same period.
“Our analysis showed that, globally, the increase in the price of Bitcoin was accompanied by a large inflow by retail investors,” the researchers wrote.
In addition, they said they found that “as prices rose and small users bought Bitcoin, the largest holders (called ‘whales’ or ‘humpbacks’) were selling – making returns at the expense of small users.”
The researchers did not have specific data on the gains or losses of individual investors. However, they were able to cash out based on the value of Bitcoin when new investors started using cryptocurrency trading apps and 20,000 dollars (roughly Rs. 16,28,200) were worth it last month.
The study also found that the largest share of new cryptocurrency investors, about 40 percent, were men under the age of 35, and they are often identified as the most “risk-seeking” segment of the population.
The researchers found that many cryptocurrency investors saw it as a speculative investment and that young people were more likely to be active in the trade in the months after a large increase in the price of Bitcoin.
They said the jump in investors after the rate hike should raise concerns about whether more consumer protections are needed.