Glassnode research reveals that 76% of Bitcoin investors are in profit even with the recent cryptocurrency downturn, following China’s crackdown on Bitcoin mining.
Bitcoin investors continue to profit, says Glassnode survey
Last Monday (24), a report issued by the blockchain analysis tool Glassnode, indicated that even with the considerable recent drop in Bitcoin (BTC) prices, most of its investors are still pocketing some profit.
The cryptocurrency, known for being the first digital currency, fell about 50% from its top price of $ 64,000 reached in April.
However, according to the report, 76% of BTC investors still have considerable gains, even after the currency plummeted to around $ 31,000. Just before the price crash began, earlier this month, the percentage of investors with a profit in the market was over 90%.
Bitcoin drop
According to the research, the movement against cryptocurrencies was initiated by a “bath of FUD”, referring to an english acronym for “Fear, Uncertainty and Doubt”. This fact, in turn, can be justified by the Chinese cryptocurrencies restriction policy.
According to the Chinese announcement, supported by the Central Bank of China, the country would take action against mining and trading in digital currencies. After the announcement, BTC went down by 10% to around $ 38,000.
However, it is worth remembering that this is not the only reason for the recent fall of Bitcoin. The currency has been in free-fall since the beginning of May, after Elon Musk announced that Tesla will no longer accept Bitcoin because of the environment.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
After Musk’s tweet, the price of the cryptocurrency has dropped from $ 54,602 to $ 52,147. This represents a drop of around of 6.7%.
The Glassnode report concluded that Bitcoin went down by more than 47% in just two weeks. This drop is the worst in the history of cryptocurrency, bypassing drops such as those seen in January/February 2018, November 2018 and March 2020.
What justifies the profit of BTC investors?
The research concluded that there are basically 3 profiles of investors on the selling edge of Bitcoin. They are: those who are at a loss (who, in general, bought BTC less than 4 months ago); those who are in profit and realize the gains; and miners, who need to sell their coins to cover costs, or, more recently, because of Chinese regulations.
From there, the study led by the blockchain platform concludes that there is no doubt that a large part of recent BTC sales have been driven by short-term crypto holders, meaning those who have purchased currencies in the last 6 months. In other words, it can be said that the novice investor panicked at the currency’s decline and sold it trying to avoid further loss.
In addition, the survey also concludes that “older” investors, who bought crypto in a period of one to three years, did not panic and kept their Bitcoins, even helping to prevent a further fall.
In the opinion of experts, crypto holders were actually selling their assets much earlier and probably pocketing gains given the over-priced performance of Ethereum at the time.
Ethereum has started an expressive rally in recent months, leaving Bitcoin’s earnings behind after making updates to improve its system and use.
