CryptoSlate’s analysis of Glassnode charts showed that Bitcoin’s (BTC) realized losses in 2022 were almost twice the size of realized profit.
Bitcoin realized losses top $195 billion
According to the chart, Bitcoin had a realized loss of $195 billion in 2022. This means that several holders sold their BTCs for less than they bought them. Most of these losses occurred in February, May, June, and November.
Source: Glassnode
These periods are significant as various events ranging from the Russian-Ukraine war to the failure of crypto projects like Terra’s UST, led to massive sell-offs resulting in these losses.
The two highest capitulations in 2022 happened during Terra’s implosion in May and June. Investors lost over $14 billion and $20 billion, respectively.
Terra ecosystem’s collapse birthed a contagion that resulted in the eventual collapse of crypto firms like Celsius, Voyager DIgital, Three Arrows Capital, and several others. Also, the global economy faced record-high inflation, forcing the Fed to increase interest rates significantly.
Bitcoin experienced its worst month during this period, as it shed around 40% of its value within 30 days.
Meanwhile, the FTX collapse in November also led to a record loss of over $10 billion in seven days for BTC holders -this was the third-largest capitulation in the year. This event led to a massive withdrawal of the flagship digital asset from centralized exchanges as investors began to favor self-custodial services.
CryptoSlate reported that investors suffered more realized losses from the FTX fallout than they did from the collapse of Luna.
Source: Glassnode
The fourth major capitulation happened in February after Russia invaded Ukraine. Sell-offs at the time resulted in over $9 billion in losses. Reports emerged that Bitcoin traded at a premium as high as $20,000 on Russian exchanges.
In summary, BTC investors’ capitulation in 2022 resulted from macroeconomic and industry-specific factors that don’t exactly speak to the value of Bitcoin.
Bitcoin realized profit is $105 billion
Meanwhile, investors still realized profits of $105 billion in 2022, most of which came from long-term holders holding BTC for over 18 months.
Source: Glassnode
Notably, the realized profits decreased as the year progressed due to declining prices. BTC’s realized gains peaked in February and April when investors that sold made over $7 billion in profits. Bitcoin traded around $40,000 in both months.
With the price declining in subsequent months, profits for investors that were selling also reduced. The lowest realized gains in 2022 was $500 million recorded in December 2022, when BTC mostly traded below $17,000.
