73% fewer Bitcoin millionaires than a year ago as crypto losses top $2 trillion in 2022

Key points

• The cryptocurrency industry was estimated to be worth nearly $3 trillion by 2022, now it is $800 billion
• After 2022, there will be 73% fewer Bitcoin millionaires
• Bitcoin has fallen 75% from its all-time high to nearly $69,000
• 25% of Bitcoin supply recorded a loss at the beginning of the year, now it is over 50%
• The number of investors holding more than 1 BTC increased by 20% as the hurdle is now easier

The cryptocurrency market was once valued at $3 trillion. To be precise, this was in November 2021, when Bitcoin trading at its all-time high of nearly $69,000.

But then came 2022. Money printing during COVID, the war in Ukraine and supply chain problems triggered inflation, forcing central banks around the world to raise interest rates to contain the worsening cost of living crisis.

With cheap liquidity drained from under the markets, Bitcoin – and crypto as a whole – felt the pinch. We saw the collapse of the top 10 cryptocurrencies, one of the Top exchangeswhich turned out to be a house of cards, and numerous other bankruptcies and scandals.

The loss was greater than $2 trillion, with Bitcoin losing three-quarters of its value and trading at $16,800 at the time of writing.

Bitcoin millionaires

Looking at on-chain data from bitinfocharts.com, Bitcoin millionaires have been dropping like flies. At the start of 2022, there were 90,000 addresses with over $1 million worth of Bitcoin. Today, there are 24,000 – a 73% drop.

“The on-chain data sums up what is glaringly obvious when looking at a Bitcoin price chart – that the party is over and investors are no longer dreaming of withdrawing from their Bitcoin holdings, at least in the near future! Nearly three-quarters of Bitcoin millionaires losing that status is perhaps the best data to sum up how ugly 2022 has been for investors” said Max Coupland, director at CoinJournal.

The percentage of supply in loss doubles in 2022

Bitcoin’s returns leading up to 2022 were astonishing. As a result, the majority of the supply was profitable, with only 25% of the supply entering the year at a loss. By year-end, that had doubled to over 50% – another astonishing statistic considering Bitcoin was the best performing asset class in the world over the past decade.

Addresses with more than 1 BTC

On the other hand, because Bitcoin is so cheap compared to last year, the number of addresses holding one Bitcoin or more – “whole coiners,” as they’re called – is at an all-time high, even if the dollar value held in those addresses is way down.

At the beginning of 2022, there were over 814,000 addresses with more than 1 BTC. By the end of the year, this number was over 978,000 – an increase of 20%.

As can be seen by zooming in to 2022 in the chart below, there were significant jumps as Bitcoin crashed due to the three major scandals of 2022 – Luna’s death spiral, Celsius’ bankruptcy, and the FTX fraud revelations.

Falling sentiment matches falling prices

Perhaps the biggest problem emerging from 2022 is related to these scandals. Crypto’s reputation has taken a hammer blow, especially with the shocking fall of FTX and disgraced former CEO Sam Bankman-Fried.

According to a November 2022 CNBC poll, only 8% of Americans have a positive attitude toward cryptocurrency.

Crypto investors have, of course, experienced similar percentage drops before, only for the market to recover. But this time, for the first time in its history, crypto is battling a pullback in the wider economy.

So far, there have been zero (or negative) interest rates and a hot money printing machine. Now we have moved on to a new environment, and crypto investors are feeling the pain. They will hope that 2023 can bring a return to prominence and restore the reputation of the wounded asset class.

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Research methodology

Address data comes from on-chain, price data from Yahoo Finance.