Jad Fawaz, a Bitcoin dealer, believes that there is no use in allowing additional distress and disappointment over a crash in the crypto market, and instead suggests finding humor in being “almost broke”.
Key factors:
- Cryptocurrency exchange Bitcoin holdings have dropped to 2.3 million from a peak of 3.1 million.
- Overall, the market cap of crypto has lost $1.63 trillion in value.
- Sam Bankman-Fried’s FTX Collapse Drove a Nail Into the Market
Fawaz, 45, from Abu Dhabi, quit his job in real estate last year to focus on trading, and has seen his gains diminish in recent months. Unable to sleep due to stress, Fawaz states that he is now down to his last two coins, Bitcoin and XRP Ripple.
Many retail investors have had enough. According to Bitfinex analysts, the amount of crypto held by retail investors on exchanges has decreased to 2.3 million from an all-time high of 3.1 million. The decline in self-custody portfolios was even more noticeable, signifying more sales than storage.
“There are signs that a significant number of retail investors have become discouraged to the point of abandoning cryptocurrencies altogether,” the Bitfinex analysts stated.
This year has been particularly tough for investors, with Bitcoin’s value down 63%, and the crypto market cap losing $1.63 trillion. The collapse of Sam Bankman-Fried’s FTX exchange was a major factor in this decline.
Linda Obi, a crypto investor from Lagos, Nigeria, believes the situation is much worse than a winter season, calling it a “bloodbath”.
“I’m going to be very honest. I think there’s a lot of hype around crypto, with influencer marketing and your favorite celebrities talking about crypto,” she added.
“People don’t investigate, they just jump in, and that should change. We’ve started having serious conversations about how we can sanitize and promote the house.”
david vs goliath
Retail crypto investors have long been at a disadvantage, and this is no different. A Bank for International Settlements study, conducted between 2015 and 2022, found that between 73% and 81% of investors likely lost money on their crypto investments.
As the industry has grown, so have more sophisticated investors, making it increasingly tough for retail traders. Adalberto Rodrigues, a trader from Lisbon, Portugal, said it is very difficult to gain an edge in the market “because we don’t have inside info, one tweet can change everything.”
The BIS researchers found that larger Bitcoin holders often sold while smaller players bought, “earning a return on the expense of smaller customers.”