Cryptocurrency

Bitcoin’s 2022 realized losses is almost double the size of realized profit

Hull Invest

CryptoSlate’s analysis of the Glassnode chart shows that Bitcoin’s (BTC) realized losses in 2022 are almost twice as large as realized gains.

Bitcoin Realized Losses Exceed $195 Billion

According to the chart, Bitcoin suffered a realized loss of $195 billion in 2022. This means he sold his BTC for a lower price than multiple holders bought. Most of these losses occurred in February, May, June and November.

Bitcoin Realized Loss
Source: Glassnode

These periods are significant, as events ranging from the Russian-Ukrainian war to the failure of crypto projects like Terra’s UST have led to massive divestments leading to these losses.

The two largest surrenders of 2022 occurred during Terra’s implosion in May and June. Investors lost over $14 billion and his $20 billion respectively.

The collapse of the Terra ecosystem caused an epidemic that resulted in the eventual collapse of cryptocurrency companies such as Celsius, Voyager DIgital, and Three Arrows Capital. The global economy also faced record-high inflation, forcing the Fed to raise interest rates significantly.

Bitcoin experienced its worst month during this period, losing about 40% of its value within 30 days.

Meanwhile, the November FTX crash cost BTC holders a record loss of over $10 billion in seven days. This was his third largest surrender of the year. The event led to a massive withdrawal of major digital assets from centralized exchanges as investors preferred self-custody services.

CryptoSlate reports that investors suffered more realized losses due to the impact of FTX than the collapse of Luna.

Bitcoin Realized Loss
Source: Glassnode

The fourth major surrender occurred in February after Russia invaded Ukraine. The sale at the time resulted in a loss of more than $9 billion. Reports have surfaced that Bitcoin has traded as high as $20,000 on Russian exchanges.

In summary, BTC investor capitulation in 2022 is due to macroeconomic and industry-specific factors that do not accurately represent Bitcoin’s value.

Bitcoin Realized Gains of $105 Billion

Meanwhile, investors are still realizing $105 billion in profits in 2022, mostly from long-term holders who have held BTC for 18 months or more.

Bitcoin Realized Profit
Source: Glassnode

In particular, falling prices led to lower realized gains as the year progressed. BTC’s realized gains peaked in February and April, when investors who sold it made more than $7 billion in profits. Bitcoin traded around $40,000 in both months.

As prices fell in the months that followed, so did investors who were selling. The lowest realized profit for 2022 was $500 million recorded in December 2022, with BTC mostly below $17,000.

Bitcoin Realized Profit
Source: Glassnode
Posted In: Bitcoin, Research

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