“I am on the verge of bankruptcy,” said Abu Dhabi-based crypto trader Judd Fawaz. “I’m laughing because there’s no point in feeling any more depressed or frustrated about it.” He’s seen his holdings evaporate in recent months.He hasn’t slept in a week because of stress.
“I had about 40 coins, then 20, then 10, then 5, now the last two. It’s Bitcoin and Ripple XRP. ’ he says. “I mean, here are his last two coins. I’ll die before I sell them.”
For many individual traders and investors, this is more than enough. Bitcoin balances on cryptocurrency exchanges, where retail investors typically trade, have fallen from an all-time high of 3.1 million in 2020 to around 2.3 million, exchange Bitfinex said. Self-custody wallet balances have not grown at the same pace, indicating more sales than storage, he added.
A Bitfinex analyst said, “There are signs that a significant number of retail investors are discouraged to exit crypto entirely.” Certainly, Fawaz is not alone.
It’s been a tough year for investors. Bitcoin’s price fell by 63% while the total cryptocurrency market capitalization lost him $1.63 trillion. Sam Bankman-Fried’s collapse of his FTX exchange has struck a long nail in the market.
In November, Bitcoin investments saw $10.16 billion in realized losses over seven days as investors were forced to let go of long-term positions, according to Glassnode data. Linda Obi, a cryptocurrency investor from the Nigerian city of Lagos, who works for blockchain firm Zenith Chain, said, “This is no longer the winter season, it’s bloodshed because the FTX crisis has brought down many companies. Because it seemed like it,” he said.
The 38-year-old said she is a “long-distance” investor with a five-year investment horizon and trades “a little bit of everything”, including altcoins and memecoins. I think there’s a lot of hype around crypto, with influencer marketing and your favorite celebrities talking about crypto,” she added.
“People don’t research, they just fly in. That should change. We started having serious conversations about how to actually sanitize and advertise the space.” David v. Goliath
Losing money for retail cryptocurrency investors is nothing new. A Bank for International Settlements (BIS) study conducted between 2015 and 2022 estimates that between 73% and 81% are likely to have suffered losses on their cryptocurrency investments. As the asset class grows, retail transactions become increasingly difficult as wealthier and more sophisticated investors like hedge funds enter cryptocurrencies.
“It’s really hard to trade on news because we don’t have inside information. A tweet can change everything,” said Lisbon-based Adalberto Rodriguez, 34, of the software company. In addition to the management of , we also trade virtual currencies. According to BIS researchers, blockchain data analysis shows that Bitcoin’s largest holders often sell and smaller players buy, “making profits at the expense of smaller users.” ”.
Trader Eloisa Marchesoni, who said she had around $2,000 on FTX and was unable to withdraw, is confident that cryptocurrencies will continue to be attractive to smaller investors. “Retail, as always, is going to suck,” said Marchesoni, who is leaving near Tulum on the coast of Mexico’s Yucatan Peninsula.
But the massive investor losses from the collapse of FTX could help regulators take action, said Charlie Cooper, head of communications at blockchain technology firm R3. “Politicians have a much harder time ignoring calls from voters who have lost money on their savings or groceries than calls from skyrocketing crypto hedge funds.”
(This article is not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)