Crypto investors witnessed a staggering $37 billion in profits in 2023, as per Chainalysis.
Data has revealed that cryptocurrency investors achieved remarkable gains of $37.6 billion in 2023, despite the lackluster performance of the market, helping to offset some of the losses suffered during the 2022 bear market.
A report from Chainalysis, shared with crypto.news, shows that investors saw substantial profits in ten out of the twelve months in 2023, with only August and September experiencing losses.
The market downturn in August 2023, which saw Bitcoin’s largest monthly loss of 11.28%, triggered a broader slump in the crypto market. Bitcoin dropped to the $25,000 range, dragging down other assets. This decline in August catalyzed the losses.
Investors panicked and began selling off their assets, hoping to hedge against further declines. Even those who showed resilience succumbed to the selling pressure in September 2023, when BTC fell below $25,000.
Chainalysis data indicates that investors lost $1.5 billion in August and $1.4 billion in September 2023. However, these losses were overshadowed by the gains witnessed in other months, particularly in Q4 2023 when the pre-bull run phase began.
Bitcoin experienced three consecutive months of positive growth from October to December 2023, surging by 45% and closing the year above the $42,000 level. This upward trend had a ripple effect across the market, enabling investors to make profitable trades.
Interestingly, over $19.5 billion, which represents more than 51% of the total profits in 2023, were generated in the fourth quarter alone. December stood out as the month with the highest gains, reaching $8.5 billion.
However, the total gains of $37.6 billion pale in comparison to the $159.7 billion profit seen during the 2021 bull run, when many assets reached new all-time highs. Nevertheless, Chainalysis confirmed that the overall market growth in 2023 matched the pace seen in 2021.
The analytics firm suggested that the difference in gains between the two years could be due to the fact that investors in 2023 predominantly chose to hold onto their assets, anticipating further price surges as the bull run had not yet materialized.
In contrast to the profitable years of 2021 and 2023, investors faced significant challenges in 2022 due to the bear market. The year was marked by various crises, such as the implosions of Terra and FTX, which sparked widespread panic and substantial sell-offs. Investors lost $127 billion in 2022.
While the gains in 2023 do not fully compensate for this figure, the ongoing bull run holds the potential for significant contributions. In terms of gains by country, Chainalysis found that U.S. investors achieved the highest profits, totaling $9.6 billion, with the U.K. following closely behind at $1.39 billion.
