Bitcoin’s realized losses in 2022 are almost double its realized profits

CryptoSlate’s analysis of Glassnode charts showed that Bitcoin’s (BTC) realized losses in 2022 were almost twice as large as realized profits.

Bitcoin realized losses peaking at $195 billion

According to the chart, Bitcoin had a realized loss of $195 billion in 2022. This means that more holders sold their BTCs for less than they bought them. Most of these losses occurred in February, May, June and November.

These periods are significant as various events ranging from the Russian-Ukrainian war to the failure of crypto projects such as Terra’s UST led to massive sell-offs resulting in these losses.

The two highest capitulations in 2022 occurred during Terra’s implosion in May and June. Investors lost over $14 billion and $20 billion, respectively.

The collapse of the Terra ecosystem spawned a contagion that resulted in the eventual collapse of crypto firms such as Celsius, Voyager DIgital, Three Arrows Capital and several others. The global economy also faced record high inflation, which forced the Fed to raise interest rates significantly.

Bitcoin experienced its worst month during this period, losing around 40% of its value within 30 days.

Meanwhile, the November FTX collapse also led to a record loss of over $10 billion in seven days for BTC holders – this was the third largest capitulation of the year. This incident led to a massive withdrawal of the flagship digital asset from centralized exchanges as investors began to favor self-custody services.

CryptoSlate reported that investors suffered more realized losses from the FTX fallout than they did from the collapse of Luna.

The fourth major capitulation occurred in February after Russia invaded Ukraine. Sales at the time resulted in over $9 billion in losses. Reports surfaced that Bitcoin was trading at a premium as high as $20,000 on Russian exchanges.

In summary, the capitulation of BTC investors in 2022 was a result of macroeconomic and industry-specific factors that do not exactly speak to the value of Bitcoin.

Bitcoin realized profit is 105 billion dollars

Meanwhile, investors still realized profits of $105 billion in 2022, most of which came from long-term holders who have held BTC for over 18 months.

In particular, the realized profit decreased as the year progressed due to falling prices. BTC’s realized gains peaked in February and April when investors who sold made over $7 billion in profits. Bitcoin traded around $40,000 in both months.

With the price decline in the following months, the profits for investors who sold also decreased. The lowest realized gain in 2022 was $500 million recorded in December 2022, when BTC mostly traded below $17,000.