54% of crypto investors held their positions during this bear market. In this period of bear market, it is possible to think that the behavior of destabilized investors has been modified. Faced with significant depreciations of major cryptocurrencies, some of them have indeed chosen to extract themselves from their positions.
Nevertheless, a new study shows that most of them have not sold their crypto-assets. Even more surprisingly, 78% of investors indicate that they have not been negatively impacted by the fall in crypto prices.
The holders hold on
A new survey published by Civic Science aimed to study the behavior of cryptocurrency investors during this bear market. After hitting their all-time highs in November 2021, Bitcoin (BTC) and Ethereum (ETH) have fallen 72% and 79% respectively.
Additionally, altcoins were not spared from the bearish rally. Since November 2021, the market capitalization of cryptocurrency markets has collapsed by 69%. This has indeed increased from more than 3 billion to 900 million dollars between November 2021 and June 2022.
Moreover, the collapse of the LUNA and the UST caused many collateral victims. Among these, Celsius Network and Three Arrows Capital were forced to file for bankruptcy.
At the same time, other companies such as Voyager Digital are suffering from this crash and are now facing significant difficulties.
Despite these setbacks, a recent study conducted by Civic Science indicates that nearly 54% of investors have not sold any part of their crypto-assets in the past few weeks.
Additionally, of the remaining 46%, 20% said they only sold a small fraction of their holdings. For their part, 26% of respondents have liquidated most of their positions.
Limited losses
Not without surprise, this study also suggests that most investors have not suffered the horrors of this bear market. This result is most surprising but tends to reassure as to the moderate weakening of investor confidence in this bearish period.
Thus, an overwhelming majority of 78% of those surveyed said they had not been negatively impacted by the fall in crypto-markets. These data are based on a survey of 4466 respondents, the vast majority of whom invested modestly in cryptocurrencies.
Moreover, among the main motivations of the investors surveyed, we find in the first place the possibility of rapid significant returns. The volatility of the cryptocurrency markets, therefore, remains, for many buyers, an incentive to engage. In addition, investors seem more equipped to deal with the latter. This may explain, in part, that few of them were impacted by the bear market.
More confident investors?
At the end of this study, it appears that a majority of investors accept the bear market as being a normal phase in the evolution of cryptocurrency prices. This agrees with the analysis of many observers.
According to these, the tough period through which tends to consolidate the investment of crypto-enthusiasts and "ridding" the markets of skeptical speculators.
Indeed, the data reported by Civic Science confirms that an overwhelming majority of buyers are holding onto their positions, convinced of the medium to the long-term potential of crypto-assets.
This information is cause for celebration and corroborates the idea that the support base for cryptocurrencies is becoming denser. Thus, the growth in the number of “true believers” holders bodes well for the consolidation of new media in the future.
Towards a bullish recovery in crypto-markets?
In addition, the rumor of recovery of crypto-markets at the end of the year is growing among analysts. The growth experienced by many cryptocurrencies in July would support this scenario.
It is indeed interesting to observe that the total market capitalization of cryptos has not fallen below the billion-dollar mark for almost 3 weeks.
Although these signals are encouraging, it would be unwise to wait for a frantic upswing in the coming weeks.
Despite the losses and the deterioration in investor confidence, which we now know is marginal, bear in mind that downside corrections are healthy and necessary.
Integral parts of a growth cycle, they allow cryptocurrencies to consolidate new supports. Moreover, they are an opportunity to let a natural sorting take place between solid projects and those whose fragility will get the better of them in the slightest storm.
Finally, remember that Bitcoin is currently going through its 18th major correction since 2012. At the time, it was only worth $5.
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