According to a study conducted by the Bank for International Settlements (BIS), 73% to 81% of cryptocurrency owners would be at a loss compared to their initial value invested. Are so many people really in the red?
Bitcoin investors in the red according to the BIS
Between the fall of Terra (Luna) and that of the FTX empire, 2022 has been a bloody year for the cryptocurrency market. Moreover, since its highest price reached in November 2021, the price of Bitcoin (BTC) has undergone a correction of around 76%.
As a result, according to a study recently published by the Bank for International Settlements (BIS), 73% to 81% of investors would have lost money on their purchases of cryptocurrencies.
In other words, three-quarters of investors have acquired crypto-assets whose current value is lower than their initial purchase price:
“Indeed, simple simulations suggest that, at the time of writing this report, 73-81% of users have probably lost money on their cryptocurrency investments. »
In parallel, the BIS estimates that 75% of Bitcoin (BTC) owners were at a loss when its price stagnated around $20,000. And today, with 1 BTC close to $16,000, the investor rate reported as a loss is likely to increase further.
Let us recall that the BRI is an authority which is defined as the bank of central banks : it facilitates dialogue and research work between different institutions on a global scale.
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However, when we analyze the study data in depth, some results seem imprecise.
The data collected by the Bank for International Settlements comes mainly from the firms Sensor Tower and CryptoCompare.
Sensor Tower has collected data on various statistics related to mobile cryptocurrency exchange downloads. This data was collected between 2015 and 2022, across more than 90 countries.
For its part, CryptoCompare took care of listing the various existing exchanges.
Having the data in hand, the BRI made two estimates to find out :
- on the one hand, the number of investors in loss or profit;
- on the other hand, the sum associated with the losses and profits made by the investors.
Regarding the first estimate, using the data provided by the two companies, here is the comment made by the financial institution :
“We find that 73% of users have downloaded an application [d’exchange de cryptomonnaie] when the price of bitcoin was above $20,000, higher than the price of bitcoin in October 2022 [20 000$]. If these users had invested in bitcoin the same day they downloaded a cryptocurrency exchange, they would have incurred a loss on that initial investment. »
In addition, the result put forward by the BRI is based on hypothetical behavior.
No existing data claims that a user buys Bitcoin on a cryptocurrency exchange the same day of its download. Besides, we can note the use of the conditional to affirm the inaccuracy of the result obtained.
Similarly, for the second estimate, here is what we can read :
“Assuming that each new user buys $100 worth of bitcoins during the first month of downloading the app, as well as in each subsequent month, 81% of users would have lost money. »
This time the estimate is based on another behavior on the part of the investor : instead of investing once, the user smoothes his investment by investing the same amount in Bitcoin (BTC) every month.
However, the advanced result remains the result of an estimate: it is representative neither of the behavior nor of the losses and profits made by the investors.
As a result, the two results claimed by the BIS are only representative of the recent craze around Bitcoin (BTC), associated with the fall in its price since 2022.
Certainly, new investors have suffered losses in recent months. However, the study is not precise and rigorous enough to define the exact percentage of investors declared at a loss on their Bitcoin (BTC) purchases.
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