Cryptoverse: this is a bitcoin ‘bloodbath’

Bitcoin price dropped 63% amid $1.63 trillion losses in market capitalisation value

Reuters December 07, 2022
Cryptocurrency price declines last week were sparked by Musk’s reversal on Tesla accepting bitcoin. PHOTO: REUTERS


“I’m nearly bankrupt,” says Jad Fawaz, a crypto trader in Abu Dhabi. “I’m laughing because there’s no point in exerting more depression and more frustration about it.” The 45-year-old, who quit his real-estate job a year ago to focus on trading, has seen his holdings evaporate in recent months.

He hasn’t slept in a week because of the stress. “I had about 40 coins and then I came down to 20 coins then I came down to 10 coins, came down to five coins and now I’m down to the last two coins, and it’s bitcoin and ripple XRP,” he says. “So, these are the last two coins and I will die before selling them.”

For many retail traders and investors, enough is enough. Bitcoin balances on crypto exchanges, where retail investors typically transact, have fallen to around 2.3 million from its 2020 alltime high of 3.1 million, exchange Bitfinex said. Selfcustody wallet balances have not grown at the same pace, indicating more selling than storage, it added.

“There are signs that a significant number of retail investors have been discouraged to the point of exiting crypto entirely,” Bitfinex analysts said. Indeed, Fawaz is not alone. It’s been a brutal year for investors.

Bitcoin’s price has dropped 63%, while the overall cryptocurrency market capitalisation has lost $1.63 trillion in value. The collapse of Sam Bankman-Fried’s FTX exchange hammered a long nail into the market. November saw a 7-day realised loss of $10.16 billion in bitcoin investments as investors were forced to exit long-term positions, the fourth-largest loss on record by this measure, according to Glassnode data.

“This is not the winter season anymore, this is a bloodbath, because the FTX crisis was like a domino that toppled so many companies,” said Linda Obi, a crypto investor in the Nigerian city of Lagos, who works at blockchain firm Zenith Chain. The 38-year-old said she was a “long-haul” investor with an investment horizon of five years and traded “a bit of everything”, including altcoins and memecoins.


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