Most crypto investors have not sold their coins since the crash of the coin market. What does this mean?
The collapse in cryptocurrency prices can seem very depressing. This is especially true given that in many ways the current bear market has been the worst period of decline for Bitcoin in a decade. However, many market participants still remain optimistic. According to a survey by research firm Appinio, 55 percent of crypto investors have not sold their coins since the start of the bearish trend. This means they are unlikely to plan to get rid of crypto assets and continue to believe in their potential.
It should be noted that waiting out the current collapse is indeed not easy. To illustrate what’s going on, just look at how coin rates have changed over the past month. Here is the corresponding table.
Changes in rates of major cryptocurrencies over the past month
Consequently, many crypto investors have lost tens of percent of their portfolio in at least a month. And if you look at the change in the situation since November 2021, when Bitcoin set its historical price high, things get even more serious. For example, BTC is down 68.6 percent as of today.
Bitcoin’s lag from its record high rate
Solana is 85 percent behind its peak.
Solana’s lag from its course record
Well Avalanche (AVAX) is performing slightly worse at 86 per cent.
Avalanche’s lag from its course record
Consequently, even this hasn’t scared investors away from linking up with cryptocurrencies – they keep walking them.
What cryptocurrency investors are doing
After the panic on the back of Bitcoin’s steep price collapse, the market will gradually establish a relatively stable position. As noted by a cryptocurrency enthusiast under the nickname lightcrypto, people will soon realise that the BTC drop itself was caused by the forced liquidation of assets of bankrupt cryptocurrency companies, miners and large funds like Three Arrows Capital by Su Zhu. As it happens, the impact of these factors on the market is very similar in strength to the news of the start of the COVID-19 pandemic in March 2020.
Appinio data confirms that only 8 per cent of investors have completely sold their crypto-assets due to the Bitcoin plunge. Overall, however, even such a sharp collapse in the major cryptocurrency has not shaken the majority’s faith in BTC. Other interesting facts from the survey include that at least 33 per cent of Americans already own crypto, while another 40 per cent of investors believe that Bitcoin is the most attractive investment for the next three months.
Bitcoin’s long-term chart
According to Cointelegraph sources, when asked about the most pressing short-term concerns, 66 percent of respondents mentioned rising inflation, 39 percent said the overall poor state of the global economy, and another 34 percent cited international conflicts. Still, the crypto market is now highly correlated with traditional assets, which is why their decline due to the aforementioned factors caused such a rapid collapse of BTC.
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In addition to external factors, there are also internal factors – among them the aforementioned “capitulation” among Bitcoin miners. The day before, it was revealed that major mining firm Argo Blockchain sold 637 BTC in June at an average price of $24,500, meaning total sales of around $15.6 million. Argo needed the funds to cover some of its debt to crypto fund Galaxy Digital, meaning the sale was indeed forced.
Back in 2021, the company took out two loans from Galaxy Digital for $20 million and $25 million. As of the end of June, its crypto reserves stood at $22 million. That said, Argo has "substantial liquidity to avoid any potential liquidation on the loans should the price of Bitcoin continue to fall," the firm said.
Argo CEO Peter Wall commented on the news of the coin sale.
We are seeing positive results from our risk management strategy, through which we have reduced the company’s exposure to BTC-backed credit and hired a full-time derivatives trader. We believe that the company is well positioned to cope with current market conditions and improve our performance.
Cryptocurrency miner
Following the sale of the cryptocurrency, Argo representatives also reported that the company had 1,963 BTC and cryptocurrency equivalents on its balance sheet as of June 30, down about 18 per cent from May. Other mining companies like Bitfarms, Core Scientific and Riot Blockchain have also previously reported selling off a significant portion of their crypto reserves in June amid the market crash.
We believe that many of the investors who continue to hold crypto have clearly had time to realise the prospects for decentralised assets and are now in no doubt about the future fate of coins. Accordingly, they are more likely to continue hoarding coins in anticipation of a further bull run. However, some part probably did not have time to sell digital assets and therefore now simply hopes to at least break even. In any case, the big half in this case means a lot - and for the reputation of the coins as well.
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