What does the recent fall in prices on Bitcoin as an investment say? Longhash analysts decided to answer this question by comparing historical indicators with the current price of BTC.
As at October, the cryptocurrency was trading at just over US $ 7,000. This is much lower than a couple of weeks before October, but still higher than the historical closing price of all trading days of the digital asset, with the exception of 410 days, according to Coinbase historical data , reviewed by Cryptoinfowatch.
In other words, from when Bitcoin was launched on January 3, 2009 until November 25, 2019, 3,978 days passed, so the fact that BTC was unprofitable investment in just 410 dates sounds quite optimistic. This means that cryptocurrency was a good investment in 3,568 of 3,978 days. This is almost 90% of the total number of trading days of the currency.
Profitable 90 Percent of The time
On the other hand, although Bitcoin has been a good investment nearly 90% of the time, this does not mean that 90% of its holders are now in the profit territory, for the simple reason that in recent years more people have been buying BTC than in it first couple of years of existence. Late adopters stand little chance of making as much profit as the early adopters. As prices went higher, subsequent buyers are more likely to lose money.
Interestingly, analysts who understand the base of the market have a way of being in profit just as in early 2019 when Bitcoin bottomed below $4000. 2019 was a particularly tough year for buyers: Bitcoin was a poor investment in 190 of 329 days this year (as of November 25, 2019) . In other words, the asset’s closing price was higher than the current price by approximately 58%.
2018 is the second worst year, and people who bought the cryptocurrency in 167 of 365 days probably lost money. In 2017, there were 53 “unprofitable” days (Bitcoin holders who bought before 2017 remain mostly in positive territory).
How many people lost money at the current rate? According to Block analysts, 56% of holders will continue to make profit if they sell at current prices, 8% of investments are close to the breakeven point and the remaining 36% will lose money. This estimate was based on the current price of the cryptocurrency and the average purchase price of the coins that are stored in Bitcoin wallets.
According to Blockchain analysts, there are currently over 43 million BTC wallets. Analyzing transaction data in these wallets shows more than 15.7 million are currently at a loss. Of course, many wallets are inactive or lost, and many people have several wallets, so the true number of real investors who have currently lost money is lower.
In addition, the losses will not be very serious for most. For 410 days of “losses,” the average difference between a higher “buy” price and today’s lowest “sale” price is just over $ 2,000.
However, to lose so much money, the owner must keep at least 1 BTC. According to BitInfoCharts, more than 90% of all Bitcoin wallets have 0.1 BTC or less. Given this, most investors probably lost less than $200. And, of course, these losses are tenable if they are sold at the current price.
Whether this evaluation reflects the general trend depends on the price movement of the cryptocurrency from the current levels. Even if the price moves up to US $ 8,000, the number of unprofitable days would decrease to a little more than 300. If the price increased to US $ 10,000, then unprofitable days would be around 150.