According to research by one of the most respected central banks in the world, around three-quarters of bitcoin investors lost their money after investing in the crypto-game.
Monday’s Working Paper by the Bank of International Settlements examined the crypto market from 2015 to 2022. It found evidence that most investors lost money, with 73 to 81% losing their initial investment. Most crypto investors were from Turkey, Singapore and the UK during this time.
According to an economist’s report, most new bitcoin investors are young “risk-seeking” men under 35 years old. It’s even more fascinating that these new crypto investors aren’t interested in crypto because they have high-minded ideals about decentralized finance or breaking free from big banks. Rather, they are looking to make a bank after being lured in by promises of huge returns for little effort.
This working paper may not be helpful if you are a crypto critic. The report assumed that users purchased bitcoins when they downloaded crypto apps. According to economists, 73% of crypto app users downloaded it when bitcoin prices were higher than $20,000. A user who bought $100 worth of bitcoin in the following months would lose 48% of their $900 investment.
The study still focuses on two key events in crypto history. This helps to inform its conclusions. The paper examined the shock caused by the crackdown on crypto mining by the Chinese government in 2021 and the unrest in Kazakhstan that triggered shocks in the cryptocurrency market.
The miners eventually moved to places such as Texas. However, after China and Kazakhstan, the report stated that fewer people were looking to adopt bitcoin. China’s event resulted in a 39% drop in bitcoin prices and a 30% decrease in new users. In Kazakhstan, prices dropped by 19%, while new users fell by 15%. Other studies by researchers on bitcoin prices have narrowed the variables further, making the correlation between new users and prices appear to be the same.
Cointelegraph noted that this research is consistent and comparable to other reports from sites such as Glassnode, which reported on Monday that the percentage of addresses making profits has fallen to a two-year low.