About three-quarters of newly discovered Bitcoin investors lose money on puts. A new study from one of the world’s leading central banking institutions shows that their funds are being put into a great crypto game.
a working paper A study of the crypto world from 2015 to 2022 by the Bank for International Settlements released on Monday found that most people 73-81% of new crypto investors inevitably lost money on their initial investment. During that time, most people who were buying cryptocurrencies came from Turkey, Singapore, the UK and the US.
According to the report, The Economist points to “risk-seeking” young men under the age of 35 as a major segment of new Bitcoin investors. More interestingly, these newfound crypto investors are not involved with the idea of cryptocurrencies due to their lofty ideals of decentralized finance and their departure from big banks. You can get big returns with minimal effort.
If you are a crypto critic, this working paper may do nothing more than confirm your own biases. I assumed. The Economist found that 73% of users downloaded cryptocurrency apps when the price of Bitcoin surged above $20,000. If so, the median investor would lose, say, $431, or 48% of his $900 investment.
Still, the study focuses on two major events in recent crypto history that help inform its conclusion. did Crackdown on cryptocurrency mining begins Both sent shockwaves through the cryptocurrency market in 2021, much like the turmoil in Kazakhstan.
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After China made crypto mining largely illegal, it forced miners to export their operations to other countries, and many moved on to neighboring Kazakhstan with the promise of little regulation and cheap electricity. However, in January rising fuel prices and blackouts associated with the unending electricity demand from crypto miners led to violent and Massive violent riotAccording to the government, shut down internet services We took 15% of our miners offline.Ah, but the real horror of events at the time, at least for Bitcoin bulls, was also sent Bitcoin price crash.
The miner finally places like texas, but after both China and Kazakhstan, the report noted that far fewer people are looking to adopt Bitcoin. 30% less. Kazakhstan lowered his prices by 19% and new users by 15%. Other studies of Bitcoin price by researchers have narrowed the variables even further, and the correlation between price and new users appears to keep the same trajectory.
People who hold large amounts of bitcoin, so-called cryptocurrency “whales” and even “humpback whales”, tend to sell during times of rising prices. All the smaller investors flooding the market are just fodder for real Bitcoin bulls to sell their stocks.
As pointed out by cointelegraphthe study is in line with other reports by sites such as Glassnode, which noted on Monday that the percentage of profitable addresses has reached a two-year low.
Cryptocurrency exchanges have been pushing the theory that cryptocurrencies are somehow the “future” and that users need to get to grips with them soon. This was especially true in 2021 when crypto prices were rising rapidly. The big-name actor pushed the “line go up” narrative, like the Crypto.com Super Bowl ad, with the tagline “Fortune favors the brave.” Just an example. More investors are now trying to withdraw their funds from Crypto.com. Mainly consists of junk coinsAn ad for FTX featuring Larry David claimed that the exchange “doesn’t want to miss out” on the future of decentralized finance, generating support across the exchange until last week. blew up.
So what about all the talk about the need to break away from the power of big banks?
“user [are] “Rather than a distaste for traditional banks, a quest for a store of value, and a distrust of public institutions, people were drawn to bitcoin because of its rising price,” said the researchers.
If most crypto investors are really concerned about decentralization in anticipation of lineups, on Ethereum moving from less centralized Proof of Work to fully centralized Proof of Stake , there will be even greater backlash.As David Gerald, author of 50 feet blockchain attackand put it in Recent blog“Decentralization is always fake.”
