The cryptocurrency collapse has Bitcoin millionaires ‘dropping like flies,’ according to a recent report.
They are a vanishing breed.
At one time, they roamed the world in great numbers, unstoppable, as their ranks seemed to increase every single day.
But then, amost without warning, they started to disappear.
No, we’re not talking about the dinosaurs; we talking about a much more recent life form: bitcoin millionaires.
The numbers of crypto tycoons have fallen by a stunning 73% at the end of 2022, according to research from CoinJournal.
“Looking at on-chain data, Bitcoin millionaires have dropped like flies,” said Dan Ashmore, crypto analyst at CoinJournal. “Entering 2022, there were 90,000 addresses containing over a million dollars worth of Bitcoin. Today, it is 24,000 – that amounts to a fall of 73%.”
Unlike T-Rex and the rest of Jurassic Park gang, bitcoin millionaires weren’t taken down by falling asteroids and plummeting temperatures.
This is a financial services sector that has been pummeled by an avalanche of major corporate bankruptcies.
Battered By a Series of Scandals
Things started heading south in May, when sister cryptocurrencies Luna and UST, or TerraUSD, collapsed and sparked a credit crunch that proved catastrophic for many firms, including hedge fund Three Arrows Capital, or 3AC.
Unable to honor its payments to crypto lenders Celsius Network and Voyager Digital, .3AC was forced into liquidation, while Celsius and Voyager filed for Chapter 11 bankruptcy.
The fall of Luna and UST lit up social media with stories of financial ruin and concern about suicides.
And then came the FTX debacle, where the cryptocurrency exchange was unable to meet withdrawal requests from panicked customers.
Sam Bankman-Fried, the company’s attention-seeking founder and CEO, was arrested last month in the Bahamas and brought back to the United States.
He pleaded not guilty on January 3 to a series of criminal charges including allegations of fraud, filed against him by the Justice Department during a hearing in US District Court in New York.
“In November 2021 the cryptocurrency market was valued at $3 trillion, when Bitcoin traded at its all-time high of close to $69,000,” Ashmore, said. “Since then, we have seen top 10 cryptocurrencies collapse, one of the top exchanges revealed to be a house of cards and numerous other bankruptcies and scandals.”
Bitcoin Sheds Three-Quarters of its Value
The loss has been greater than $2 trillion, Ashmore added, with Bitcoin shedding about three-quarters of its value. Bitcoin was trading at $17,340 on January 9.
“Nearly three-quarters of Bitcoin millionaires losing that status is perhaps the best piece of data of all to summarize how ugly 2022 was for investors,” he said.
The on-chain data shows that “the party is over and investors are no longer dreaming of retirement off their Bitcoin holdings,” Ashmore said.
In addition to a shaky economy, cryptocurrency will have to contend with a massive blow to its reputation. CoinJournal cited a CNBC survey that found only 8% of Americans have a positive view of cryptocurrency as of November.
Of course, now that Bitcoin is so cheap compared with last year, the number of addresses containing one Bitcoin or greater – “whole coiners”, as they are known – is at all-time high, even if the dollar value contained in those addresses is way down.
Entering 2022, there were over 814,000 addresses holding more than 1 BTC. By the end of the year, this number was over 978,000, a 20% increase.