Key Takeaways
- Cryptocurrency industry was valued close to $3 trillion entering 2022, now it is $800 billion&
- There are 73% less Bitcoin millionaires after 2022
- Bitcoin has pulled back 75% from its all-time high of close to $69,000
- 25% of the bitcoin supply was in a loss entering the year, now it is over 50%
- Number of investors holding greater than 1 BTC jumped 20% as the hurdle became much more attainable
& & &
Once upon a time, the cryptocurrency market was valued at $3 trillion. To be precise, this was in November 2021, when Bitcoin traded at its all-time high of close to $69,000.
But then along came 2022. Inflation sparked as a result of the COVID money printing, war in Ukraine and supply chain issues, meaning central banks worldwide were forced to hike rates to curtail a spiralling cost-of-living crisis.
With the cheap liquidity pulled out from under markets, Bitcoin &- and crypto as a whole &- felt the pinch. We have seen top 10 cryptocurrencies collapse, one of the top exchanges revealed to be a house of cards and numerous other bankruptcies and scandals.&
The loss has been greater than $2 trillion, with Bitcoin shedding three-quarters of its value as at the time of writing, trading at $16,800.
Bitcoin millionaires
Looking at on-chain data from bitinfocharts.com, Bitcoin millionaires have dropped like flies. Entering 2022, there were 90,000 addresses containing over a million dollars worth of Bitcoin. Today, it is 24,000 &- that amounts to a fall of 73%.
“The on-chain data sums up what is glaringly obvious from looking at a Bitcoin price chart &- that the party is over and investors are no longer dreaming of retirement off their Bitcoin holdings, in the near future at least! Nearly three-quarters of Bitcoin millionaires losing that status is perhaps the best piece of data of all to summarise how ugly 2022 was for investors”& said Max Coupland, Director at CoinJournal.&
Percent in supply in loss doubles in 2022
Bitcoin’s returns before 2022 were astonishing. As a result, the bulk of the supply was in profit, with only 25% of the supply loss-making entering the year. By year-end, this had doubled to over 50% &- another stunning statistic when considering that Bitcoin was the best-performing asset class in the world over the prior decade.&
Addresses holding greater than 1 BTC
On the flipside, with Bitcoin being so cheap compared to last year, the number of addresses containing one Bitcoin or greater &- “whole coiners”, as they are known &- is at all-time high, even if the dollar value contained in those addresses is way down.&
Entering 2022, there were over 814,000 addresses holding more than 1 BTC. By the end of the year, this number was over 978,000 &- that is a rise of 20%.
As can be seen when zooming in on 2022 on the below chart, there were significant jumps when Bitcoin plunged off the back of the three major scandals of 2022 &- Luna’s death spiral, Celsius’ insolvency and the revelations of fraud at FTX.&
Dropping sentiment matching falling prices
Perhaps the biggest problem emerging from 2022 is related to these scandals. The reputation of crypto has taken a hammer blow, most notably with the shocking downfall of FTX and disgraced former CEO Sam Bankman-Fried.&
According to a CNBC survey as of November 2022, only 8% of Americans now have a positive view of cryptocurrency.&
Crypto investors have seen similar percentage declines before, of course, only for the market to bounce back. But this time, crypto is fighting against a pullback in the wider economy for the first time in its history.&
Until now, it had been zero (or negative) interest rates and a warm money printer. Now, we have transitioned to a new environment, and crypto investors are feeling the pain. They will hope that 2023 can bring a return to prominence and start mending the reputation of the wounded asset class.&
If you use our data, then we would appreciate a link back to& https://coinjournal.net. Crediting our work with a link helps us to keep providing you with data analysis research.&
Research Methodology
Address data taken from on-chain. Price data from Yahoo Finance.&
The post 73% less Bitcoin millionaires than a year ago, as crypto losses top $2 trillion in torrid 2022 appeared first on CoinJournal.
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