New data reveals that cryptocurrency investors made an impressive $37.6 billion in profits in 2023, despite the market’s lackluster performance, helping to offset some of the losses incurred during the 2022 bear market.
A report from Chainalysis, shared with crypto.news, shows that investors saw substantial gains in ten out of the 12 months of 2023, with only August and September experiencing losses.
The downturn in August 2023, marked by Bitcoin’s largest monthly loss of 11.28%, triggered a broader slump in the crypto market, with Bitcoin dropping to the $25,000 range and dragging other assets down with it. This led to losses in August as panic set in and investors began selling off their assets to hedge against further declines. Even those who remained resilient succumbed to selling pressure in September 2023, when BTC fell below $25,000.
Chainalysis data reveals that investors lost $1.5 billion in August and $1.4 billion in September 2023. However, these losses were outweighed by gains in other months, particularly in Q4 2023, when the pre-bull run phase kicked off.
Bitcoin saw three consecutive months of growth from October to December 2023, surging by 45% to close the year above $42,000. This positive trend had a ripple effect across the market, allowing investors to take profits.
Interestingly, over $19.5 billion, representing more than 51% of the total profits in 2023, were made in the fourth quarter alone, with December seeing the largest monthly gains at $8.5 billion.
While the total gains of $37.6 billion in 2023 pale in comparison to the $159.7 billion profit seen during the 2021 bull run, Chainalysis confirmed that the overall market growth in 2023 mirrored the pace of 2021.
The analytics firm suggested that the difference in gains between the two years could be attributed to the fact that investors primarily held onto their assets in 2023, anticipating further price increases as the bull run had not yet materialized.
In contrast to the profitable years of 2021 and 2023, investors faced challenges in 2022 due to the bear market, marked by crises like the Terra and FTX implosions, leading to panic and significant selloffs. Investors lost $127 billion in 2022.
Although the gains in 2023 do not fully cover this loss, the ongoing bull run has the potential to make significant contributions. In terms of gains by country, U.S. investors reaped the highest profits at $9.6 billion, followed closely by the U.K. at $1.39 billion.
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