STUDY FINDS THREE OUT OF FOUR BITCOIN INVESTORS HAVE LOST MONEY

Wed 16 November 2022:

According to a research released on Monday, almost 75 percent of consumers who purchased bitcoin lost money, as the cryptocurrency industry is still reeling from the collapse of a significant exchange that has undermined confidence.

Data on cryptocurrency investors in 95 countries between 2015 and 2022 was examined by economists at the Bank of International Settlements, an organization that is frequently referred to as the central bank of central banks.

“Overall, back of the envelope calculations suggest that around three-quarters of users have lost money on their bitcoin investments,” they said in their study.

During the period studied, the price of bitcoin rose from $250 in August 2015 to peak at nearly $69,000 in November 2021. It is now trading at around $16,500.

The number of people using smartphone apps allowing one to purchase and sell cryptocurrencies rose from 119,000 to 32.5 million during the same period.

“Our analysis has shown that, around the world, bitcoin price increases have been tied to greater entry by retail investors,” the researchers wrote.

Moreover, they said they found that “as prices were rising and smaller users were buying bitcoin, the largest holders (the so-called ‘whales’ or ‘humpbacks’) were selling — making a return at the smaller users’ expense.”

The researchers did not have direct data on the gains or losses of individual investors. However, they were able to extrapolate based on the price of bitcoin when new investors began using cryptocurrency trading apps and the approximately $20,000 it was worth last month.

The study also discovered that men under 35, who are typically seen as the most “risk-seeking” portion of the population, made up the largest segment of new bitcoin investors, accounting for about 40% of them.

Researchers discovered that the majority of cryptocurrency investors viewed the asset class as speculative and that young men tended to be more active traders in the months after a significant increase in the price of bitcoin.

They claimed that additional consumer protection may be required given the increase in investors following price increases.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

___________________________________________________________________________________________________________________________________

FOLLOW INDEPENDENT PRESS:

TWITTER (CLICK HERE)
https://twitter.com/IpIndependent