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Bitcoin

More Than 50% of Bitcoin Addresses Are Now In Loss (coindesk.com) 83

Posted by BeauHD from the hold-on-for-deal-life dept.
Most addresses holding bitcoin (BTC), the largest cryptocurrency, are now in the red, the first time that's happened since the start of the coronavirus-induced crash of March 2020. CoinDesk reports: Just over 51%, or 24.6 million addresses of the total 47.9 million, are below purchase price on their investments, according to data provided by blockchain analytics firm IntoTheBlock. About 45% are in the money, which means they are boasting unrealized gains, while the rest are roughly at break-even. IntoTheBlock defines out-of-the-money addresses as those that acquired coins at an average price higher than bitcoin's going market rate of $16,067.

The bearish momentum looks overdone, according to Lucas Outumuro, head of research at IntoTheBlock. Previous bear markets ended with the majority of addresses being out of-the money. The percentage of out-of-the-money addresses stood at 55% in January 2019. Bitcoin bottomed near $3,200 around the same time and began a bull run three months later. Further reading: Silence From Digital Currency Group's Genesis Spooks Crypto
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More Than 50% of Bitcoin Addresses Are Now In Loss More

More Than 50% of Bitcoin Addresses Are Now In Loss

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  • HODL!!!! (Score:5, Informative)

    by iAmWaySmarterThanYou ( 10095012 ) on Monday November 21, 2022 @08:43PM (#63070120)

    Only losers sell! HODL! It can only go up!

    68k to 16k. Nice to be one of those people who got in years ago at a dime, not so great for the musical chair suckers who hopped aboard the Can Only Go Up Train at 68k or even 17k.

    I'll be back to repeat that last part as it passes down through 12k, 8k, and so on to the natural value of a Bitcoin. Zero.

    I think I'll go by the flower shop this weekend and pick up some tulips. At least they'll always be worth something.

    • There are places that you can make that bet but you won't earn anything making it here

      • Re: (Score:1)

        by Anonymous Coward
        The whole point is it takes a moron to not understand they are gambling. gambling against it is no better it is still gambling.

        • So you admit you have no idea if it will go down or will make people rich.

          Your financial advice is very useful. You should publish a newsletter.

    • Since there is no intrinsic value and no dividend...if everyone invested the exact same amount of money, wouldn't 50% of them make money and 50% of them lose money because of math?

      • Since there is no intrinsic value and no dividend...if everyone invested the exact same amount of money, wouldn't 50% of them make money and 50% of them lose money because of math?

        That's not how investing works PRECISELY because investing relies on the existence of intrinsic value of the product/service that the investee provides.

        Or are you referring to "investing" in bitcoin? That's not supposed to be a zero-sum game either. It is literally designed to be infinity-sum game.
        That's what the "It can only go up!" and "deflationary by design" means. Once all that 21 million bitcoin are mined, the value will keep going up due to scarcity, eventually reaching infinity.
        I.e. On a long enough

      • No, because bitcoin is actually a less than zero sum game thanks to the economics of crypto. It requires expensive hardware and expensive power to run. Then massive amounts get wasted on marketing and scamming people out of their money. The only hope for crypto is that enough illegal commerce happens, paying fees that fund all this investment.

      • No. If everyone puts money in a bucket and the bucket catches on fire, everyone loses all their money.

      • Re: HODL!!!! (Score:4, Insightful)

        by ToasterMonkey ( 467067 ) on Tuesday November 22, 2022 @02:38PM (#63072048) Homepage

        Nope, because this is about unrealized gain/loss. Picture a stock or crypto junk as a pond.

        The water line is the current price, when you buy, you put water in, when you sell, you take water out. All trade happens at the water line, and nobody cares which water was originally "yours". With more buying than selling it goes up, the opposite and it goes down, and it usually oscillates. One man's sale is another's purchase, but if you want to buy _right now_ you have to put a little more in than I take out is how it works, same for selling. If you want to sell _right now_ you leave a little behind. That's what actually moves the water level.

        You can stick a little flag in the mud when you buy to remember the price you paid. Take it out with your water when you sell. All these flags are "unrealized" gains and loss, they haven't been sold yet.

        When the water is at an all-time high and going up, everyone's flags are wet, they're all in the money 100%. As it retreats, more flags are left dry. So this research says the water level is currently at the 50% mark, as many flags on one side as the other. But it could go anywhere, there's nothing holding it at 50%.

        Anyone can sell at any time, so flags are always being plucked out from from up high, down in the muck etc., but they only go back in at the waterline. The flags aren't evenly distributed up the bank, they're going to be concentrated wherever the water line spends the most time at, when and where the most actions happens.

        So all time high, about 100% could be in the money, and in theory, if everyone with a wet flag started selling and that repeated, you could drive that number down to nothing. Still some water left until the last flag is gone, but it's below everyone's flags.

        You might be thinking of the proportion of people that had realized gains and losses after all the flags are pulled, and if they all put the same amount in, and at the same time? None of those happened though, that's not how a market works.

        • With more buying than selling it goes up

          Not saying the gist of your message is wrong, but the above quote certainly is. There's always a balance between buying and selling. Otherwise there's no transaction...

  • House of Cards taking a long time to fall. (Score:5, Insightful)

    by zurtle ( 785688 ) on Monday November 21, 2022 @08:46PM (#63070122) Homepage

    I mean, who didn't see this coming? Blaming it on coronavirus is hilarious, too.

    • You misread the article. Coronavirus induced a crash of btc in 2020 from 8k to 4k then went up to +60k, they are not blaming covid for the 60k to 15k crash.

    • Everyone saw this coming because this is the natural four year cycle playing out. And every new cycle brings a new host of rubes yelling to anyone who will listen that it's all a "house of cards". And every cycle, the Bitcoin holders get richer.

      • We saw this when BTC was in the hundreds, and Mt. Gox was doing insanely well. However, there are not any new exchanges coming up, and we don't see extremely hyped cryptocurrency companies buying Superbowl air time anymore.

        Is BTC going away completely? Nope. Too big to fail, and too many people "hodling" assets in it, for better or worse. However, will BTC descend to a price point and just sit there near zero, such as the old GM stock that was bankrupted and new stock shares issues, or will someone come

  • I think this is kind of how Ponzi schemes all work toward or possibly that would be the first milestone of the end. This is certainly different to other Ponzi schemes as each individual creates their own entry and exit but in the end it is really hard to see what you are buying (other than agreed value which is not a static number.) Bitcoin in the end is what it is and isn't what people seem to hope that it is (a digital store of value) it is a digital store of bitcoins the only point is where is the value.
    • You can say btc is bad but i don't see how it is a ponzi. There is no pyramid, it is a speculative asset. The loser is the last seller. If btc is a ponzi then stock market is a ponzi too.

      • I can assert a few ways:

        1: Less reward for newcomers than earlier adopters. Look how rewards have been halved, and continue to be halved. All being equal, the amount of work or wealth to obtain a unit of BTC was definitely less in the past than it is now, or will be in the future.

        2: Difficulty in leaving the BTC ecosystem. If you are tied to an exchange, you may not be able to withdraw your proceedings... or you may not have any at all, if the wallet is custodial and a rug pull is done.

        3: Every transa

        • 1: Less reward for newcomers than earlier adopters.

          That has nothing to do with the definition of a Ponzi scheme. It's just an outcome of the flow of money in a Ponzi scheme.

          2: Difficulty in leaving the BTC ecosystem.

          Has nothing to do with a Ponzi scheme at all, even tangentially.

          3: Every transaction makes money for miners, and mining was far easier for the earlier people.

          Has also nothing to do with the definition of a Ponzi scheme.

          Look the comparison between bitcoin and stocks is silly, but the fact of the matter is it can be compared to many speculative assets. Additionally Ponzi schemes are illegal and prosecuted even in Wallstreet fraud friendly USA. Yet this isn't happening. That should

      • Re: (Score:2)

        by ceoyoyo ( 59147 )

        Bitcoin isn't a Ponzi scheme, but it certainly enables them. Many of the crashed exchanges, including FTX, offered very high interest rates, made possible only by new money buying in. When that stopped, they crashed. Oh, but it's not an actual Ponzi scheme (and thus illegal) because it's not actual money, it's crypto, etc. etc.

    • Ponzi schemes don't survive the first crash. Bitcoin acts nothing like a Ponzi scheme.

      • Citation needed.

      • The asset itself cannot be a Ponzi, however it has things in common with them.
        Particularly the fact that crypto requires a constant influx of new suckers^H^H^H^H^H^H^Hinvestors to maintain any real value, because its actual commerce is negligible.

        When people stop buying crypto, crypto becomes (near) worthless. It'll of course have some base value for whatever commerce you can actually execute with it, but at that point, it's about as useful as toilet paper.

        • When people stop buying iPhones, they too become worthless.

          Tautologies feel good, don't they?

          • Does it hurt to have a brain as feeble as yours?

            If people stop buying iPhones, all the people with iPhones, that still work, assign definite value to them.
            This isn't a difficult math equation. iPhones have intrinsic value, crypto's primary value is speculation, which drops to zero if you can no longer speculate.

            I've had some good debates with some intelligent crypto bros... But you're not one of them.

            • Go learn what value means in economics and come back for an adult conversation.

              • Go learn what value means in economics and come back for an adult conversation.

                That is your retort? lol.

                If nobody buys your till, can you still use it to till earth?
                It is you who clearly never A) went to college, or B) took a remedial econ course.

    • Crypto really seems to be more of a pump-and-dump scam than a Ponzi scheme.

      You can see it in the price trends. Crypto is either going up fast or crashing in value quickly. You won't usually see it holding at a steady value for a long time.

      • Indeed. It has things in common with a Ponzi scheme, but the asset itself can't be that.

        What can be said, is that nearly all of its value is derived from people playing the Great Fool game.
        Within that game, there is room to do legitimate things with that value, but absent that game and the promised returns enabled by the Greater Fool, it's nearly worthless.

        The Greater Fool is very susceptible to pump-and-dumps.

  • Unbelievable (Score:5, Funny)

    by LeeLynx ( 6219816 ) on Monday November 21, 2022 @09:11PM (#63070172)
    Who could have predicted that investing in imaginary assets backed by hopes, dreams, and unicorn farts could have been a bad idea.

  • DCA (Score:1)

    by bbos ( 1048782 )
    Dollar Cost Averaging. Farg don't complain - this is how markets work and it is a good thing in many ways (for many people). Talk about a first world wingey attitude problem. "Oh no, I must always see my investments go up, forever."

    • Seeing your investments go down in flames is only a first world problem if it happens in the first world.

      Terra took many people's pension funds and savings down with it, some of the victims committing suicide.

      Keep calling it first world problems, by all means, and watch whatever respectability cryptocurrencies have left, vanishes down the drain.

  • Wrong conclusions, Slashdot is better than this (Score:5, Insightful)

    by Gandoron ( 681748 ) on Monday November 21, 2022 @09:52PM (#63070230)

    This report from Coindesk is terrible and draws a completely the wrong conclusion. They are looking at when public wallets had crypto currency transferred into them. The vast majority of public wallets are not part of an actual Crypto buy/sell. Someone can transfer or split their assets into different crypto wallet addresses at any time. it doesn't mean they've realized gain/loss of $ or that the new wallet is "in the red".

    In fact most trading happens in exchanges, which hold all of the assets in a handful of custodian warm/cold wallets. All of the buy/sell transactions within the exchange are not transparent, and external research has no idea how much was gained or lost (or how much the exchange takes in fees or self-serving). External wallets are only used when someone moves cash in or out of that exchange to a personal wallet.

    So this research shows essentially nothing. Doesn't show what happens inside an exchange, and draws a completely wrong conclusion from public wallet transactions.

  • Technical analysis I have seen says that Bitcoin has broken through some key barriers and has more room down.

    On top of that there is still much unwinding to occur from FTX, many shoes yet to drop.

    The time to buy BTC may come, but I really don't think that time is now. Do as you will but do so with open eyes and a plan in case whatever you put in is lost. Always diversify.

  • Unless all of the leveraged Ponzi crypto The bearish momentum looks overdone, are in the process of going under. At the that point you don't have the infrastructure in place that allowed for the leveraged circle jerk wash trading that let crypto skyrocket.

  • Don't call it Investing (Score:3, Insightful)

    by bobjr94 ( 1120555 ) on Monday November 21, 2022 @11:52PM (#63070346) Homepage
    I hate all the posts I see with people say they are investing in some crypto....It's more like gambling. A few people are going to make a lot of money, but likely not them.

    • Talk for yourself, I invested all my money in Las Vegas.

      Payout is immediate, but only if it actually pays off.

    • I feel so much better about my weekly powerball ticket now.

    • Every investment by someone clueless as to how their investment works is gambling. The only thing differing investing and gambling is knowledge.

      • The difference in (real) investing vs gambling is that the stock market has always provided positive returns over the long run while gambling has always provided negative returns. But other than that, yeah, they are the same. SMH

  • ... and nothing of value was lost (Score:5, Insightful)

    by kiviQr ( 3443687 ) on Monday November 21, 2022 @11:59PM (#63070348)
    tulip bulbs at least look nice when you plant them.
  • Post your private keys. It is worthless.

  • Now is the time to buy! Buy! It can't go further down!

    --signed, someone looking desperately for the bigger idiot.

  • this study shows the quantity of wallets in a gain or loss position. what it doesn't show is the $$ losses. someone buying at 60k has lost 44k. someone who bought at 10k has made 6k. the 1 gain offsets the one loss, however, the net difference is 38k. there have been many more $$ losses in bitcoin. you can also look at the volume and guess that a certain percentage of buyers above 20k are still holding. since this is a speculative 'asset', that % is going to be pretty low, but probably 20-30%, meaning the a

  • Assume I buy a Bitcoin for $3k and sell it for $75k, then buy again at $30k. According to this metric, I'm sitting on a $15k loss. But in reality, I'm sitting on $42k cash and a Bitcoin, and my initial investment was only $3k.

  • Counting coins that moved on a certain date as acquired for cash on that date is moronic. Giving play to articles like this is just feeding traffic to clickbaiters. Oh wait, looking at the ads at the bottom of the page, that's what slashdot is now. Pathetic.

  • Well, let's see, back in the 1990s, a person could mine a coin a day, with an average desktop computer. So, a system that rewards early adoption as more people pile on--expecting reward as others do: is a pyramid scheme.

  • "Quick, invest it all, or you'll miss your chance to lose everything!"

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