Over the weekend, Bitcoin’s price dropped below $60,000 amid a sell-off by major holders like the German and US governments. This led to one of the biggest drops the leading cryptocurrency has seen in the past two years, costing the market billions of dollars. However, despite this, Bitcoin holders are still seeing significant gains, with the vast majority of investors currently making profits despite the market crash.
Bitcoin Holders Enjoy Huge Gains
according to Data According to chain tracker IntoTheBlock, there are around 53.57 million Bitcoin holders worldwide. Of those investors, 83% are still making profits despite Bitcoin’s price falling below $60,000, currently sitting just above $56,000.
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This leaves only about 17% of all Bitcoin holders who are not currently making a profit. Of this number, 13% are losing money, meaning they bought their Bitcoin when the price was higher than the current value, leaving 4% of holders at breakeven. This means that these 4% bought their Bitcoin around the current value, and are therefore neither making nor losing money at the current price.
At these ratios, this means that about 44.61 million Bitcoin investors are still enjoying profits on their positions. 6.8 million Bitcoin holders are now suffering losses, and about 2.16 million investors are currently sitting at breakeven.
Interestingly, the majority of these investors sitting in profit have entry prices below $50,000, meaning that even with another 10% collapse from here, the vast majority of Bitcoin investors will still see their holdings in profit.
Long-term Bitcoin holders are at risk of losses.
While the data shows that the vast majority of Bitcoin investors are still making profits, there is a growing trend that particularly affects long-term holders. According to feelings a reportThe average long-term return of Bitcoin holders is at risk of falling into losses for the first time in more than a year.
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However, this is not a negative for the price, given how Bitcoin has responded in the past when the average long-term returns of Bitcoin holders have dipped into the red. As Santiment points out, this is usually a good time to buy, especially when “Bitcoin’s 30-day and 365-day average ROI is in negative territory.” The tracker added: “This is when there is mathematical proof that you are buying compared to the pain of other traders.”
To illustrate how important this buying opportunity is, Santiment says: “If you had bought last time when both lines were in negative territory, your return on Bitcoin would have been +132%.” In plain terms, developments like this can often be a good indicator of where the bottom is and when to start buying.
Featured image created using Dall.E, chart from Tradingview.com