Bitcoin price crash has left 40% of investments, Traditional and crypto markets have been in free fall for several days, plunging into bear territory, when assets are trading at 20% or more below their previous high. The S&P 500 has lost 15% this year, while half of the Nasdaq index’s equities have lost more than 50% from their highs.
Bitcoin has dropped even more. The popular cryptocurrency is currently selling at $32,000, down roughly 55% from its November top of $69,000. For many Bitcoin investors, this means their portfolio has gone negative.
Only 60% of Bitcoin investments remained lucrative when the cryptocurrency was priced at $33,600 per unit, according to analysis from blockchain analytics startup Glassnode. The remaining 40% of investments were lost to the water. As Bitcoin’s price has plummeted even further, hovering between $31,000 and $32,000, a growing number of investments have lost money.
“This is the fourth most severe drop in profitability in the last three years,” Glassnode added, referring to the 15.5 percent of total investments that have become unprofitable in the last month alone.
The number of profitable Bitcoin investments fell 18.1 percent and 19.1 percent in July and December 2021, respectively, marking the third- and second-worst monthly drops ever. According to Glassnode, the most profitable month was March 2020, when 35.4 percent of the market lost money in 30 days.
Bitcoin’s precipitous price drop, according to Glassnode, is being driven by “shrimps and whales” racing to get money out of the market, implying that investors with tiny and large investments in the cryptocurrency are all trying to avoid the catastrophe.
According to Glassnode, Bitcoin transactions have had a “high degree of urgency” in the last week. The overall value of transaction fees has surpassed the previous peak set during the December crypto meltdown.
This week, more than $3.15 billion in value has flowed “into or out of” Bitcoin exchanges, according to the group the largest level of liquidity since November 2021, when exchange movements peaked.
However, not everyone is looking to sell. Some investors are still “hodling” their position—an insider word for holding on to a position or even bolstering it by purchasing the drop and racing into the weaker market. El Salvador’s president revealed on Monday that his government has purchased 500, which he declared legal tender in September of last year.
Smaller investors those with less than one Bitcoin have been the “strongest accumulators” of cryptocurrencies during the selloff, according to Glassnode. Even that group of retail aficionados is buying at a slower pace than before.
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