Bitcoin: 73% to 81% of buyers lost money

According to a study by the Bank for International Settlements (BIS), a large majority of cryptocurrency buyers have lost money.


A large majority of bitcoin buyers have lost money in their investment.
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UA detailed study by the Bank for International Settlements (BIS) indicates that 73% to 81% of Bitcoin buyers have lost money on their cryptocurrency investments. This institution, considered the central bank of central banks, attempts in this study published on November 14 to understand the profiles of these buyers, based on data from 95 countries over the period 2015-2022, in order to analyze the implications of cryptocurrencies. in the financial system.

It is also a question of determining how to put in place rules to protect consumers when “three quarters” of buyers have lost money on their bitcoin investments, according to their calculations.

The price of bitcoin has risen from $250 to $69,000

The study, which is based on data concerning, in particular, downloads of bitcoin purchase applications or the daily frequency of transactions, shows that nearly 40% of users are men under 35. years, more ready to take risks, compared to 25% of men aged 35 to 54 and 35% of women, the majority of them being under 35 years old.

Over the period studied, the price of bitcoin rose from $250 in August 2015 to $69,000 at its peak in November 2021. The average number of daily app users then rose from around 119,000 to more than 32. .5 million, jumping in particular between the end of 2017 and the beginning of 2021, quantifies the study which highlights a correlation between the rise in bitcoin prices and the arrival of new users.

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According to an equation developed by BIS economists, a 1 percentage point rise in bitcoin translates to a 1.1% increase in the monthly average number of daily users. However, some 73% of users downloaded an app when bitcoin’s price was above $20,000, more than its price in October 2020, meaning they lost money, they point out. . If a user first invested $100 in the first month and then the same amount in subsequent months, around 81% of buyers lost money, according to their calculations.

The analysis of the size of the portfolios invested nevertheless highlights that the small buyers of bitcoin, with a portfolio ranging from 1 to 1,000 bitcoins, tended to buy in the upward phases while the large investors, called the whales , with wallets of over 100,000 bitcoins, tended to sell off. They thus made profits “at the expense of the smallest users”, according to this study. The idea that cryptocurrencies will “democratize the financial system” therefore deserves to be analyzed in more detail, according to its authors.

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