“I’m almost broke,” said Jad Fawaz, a cryptocurrency trader in Abu Dhabi. “I’m laughing because there’s no point in more depression about it.”
The 45-year-old trader, who quit his real estate job to focus solely on cryptocurrency businesses, has seen his investments evaporate in recent months.
“I had about 40 coins and then I reduced it to 20 and then to 10, to five and now I’m holding the last two and they are bitcoin and ripple XRP,” he said. “These last two coins I will die before I sell them.”
For many retail investors, the time has come to stop.
Bitcoin balances on cryptocurrency platforms have dropped to around 2.3 million from an all-time high of 3.1 million in 2020, brokerage Bitfinex said.
Self-custody portfolio balances have indicated more sales than storage, he added.
“There are signs that a significant number of retail investors have been discouraged to the point of exiting cryptocurrencies completely,” said analysts at Bitfinex.
The year was brutal for investors. Bitcoin price dropped 63% while the overall market lost $1.63 trillion in value.
November saw a 7-day realized loss of $10.16 billion in bitcoin holdings as investors were forced out of long-term positions, the fourth-biggest drop on record by that measure, according to data from Glassnode.
“This is no longer the winter season, this is a bloodbath, because the FTX crisis was like a domino that knocked several companies down,” said Linda Obi, an investor in the Nigerian city of Lagos who works at blockchain firm Zenith Chain. .
The 38-year-old said she was a “long-term” investor with a five-year investment horizon and had traded “a little bit of everything,” including altcoins and memecoins.
“I will be very honest, I think there is a lot of hype around cryptocurrencies with influencer marketing and your favorite celebrities talking about it,” he added.
“People don’t search and just enter, and that must change. We started having serious conversations about how we can really clean up the market and promote the market.”
fight against giants
Retail investors losing money are nothing new. A study by the Bank for International Settlements (BIS) conducted between 2015 and 2022 estimated that 73% to 81% likely lost money on their cryptocurrency investments.
The BIS researchers said that analysis of blockchain data found that larger bitcoin holders often sold while smaller investors bought, “taking a return at the expense of smaller users.”
Eloisa Marchesoni, a trader who said she had about $2,000 held in FTX, is confident the sector will retain its appeal to smaller investors.
“Retail will gobble it up, as usual,” said Marchesoni, who lives near Tulum, on the coast of Mexico’s Yucatan Peninsula.
However, heavy investor losses from the FTX collapse could serve to spur regulators into action, said Charley Cooper, head of communications at blockchain technology firm R3.
“Politicians have a much harder time ignoring voters who have lost their savings than high-flying cryptocurrency hedge funds.”
Source: CNN Brasil
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