Proprietary Data Insights
Top Financial Pros Cryptocurrency Searches This Month
What Percentage Of Crypto Holders Are Underwater?
There’s a decent chance you’re underwater – i.e., losing money – on your crypto holdings.
Sucks, yes. However, The Juice puts some perspective around the issue in a second. There’s no need to freak out. Every stock investor goes through the same – or similar – growing pains as today’s crypto investor.
But first, we like to check in with the intotheblock platform from time to time to see to what extent people are underwater on their crypto holdings. intotheblock scans crypto wallets to come up with the following numbers.
Lots of good data on Bitcoin (BTC) there.
Such as, large investors own 11% of Bitcoin’s circulating supply. “Large investors” meaning whales (addresses that own more than 1% of the supply) and other investors who hold between 0.1% and 1% of the supply. You can also see how long people have held Bitcoin, with 61% HODLing for a year or longer.
We’re most concerned with the first green and red numbers, showing that 47% of Bitcoin holders are in the money (sitting on on-paper profits) and 50% are out of the money (sitting on on-paper losses).
For the record, 50% of Ethereum (ETH) and Dogecoin (DOGE) longs are underwater. Same as Bitcoin.
However, this isn’t the case for meme coin, Shiba Inu (SHIB).
73% of people who took a shot on SHIB are, at least on paper, losing money right now.
If you’re one of those people, how do you proceed?
The Juice has some simple and straightforward thoughts. Scroll with us.
I retired at 42 by trading options. My method is different. Unlike anything you’ve probably ever seen before. For the first time, I put together a 30-second “live demo” to show you how it works.
Crushed By The Crypto Crash? 5 Ways You Can React Now
Simple and straightforward.
If you’ve taken cryptocurrency losses or you’re sitting on them, you’re not a reckless idiot. In fact, you might just have something in common with early investors in some of this century’s hottest stocks.
Don’t Beat Yourself Up. Because crypto’s relatively new (only about 13 years old), lots of people don’t understand it. When people don’t understand something, they sometimes like to (falsely) ridicule it.
In this case, the critics make it sound like cryptocurrency investors are reckless speculators, throwing money at lottery tickets. This is so not true. In fact, the same type of people were probably saying the same types of things about tech investors back in the day.
So, while crypto might be new, investing in high-risk/high potential reward assets is anything but. It has been around for ages. Don’t get down on yourself for running into the present turbulence. It was hardly unexpected.
Double Down? In 1999, Time Magazine named Amazon.com’s (AMZN) Jeff Bezos Person of the Year. This happened during the dot-com boom and bust at the turn of the century (1999-2001). At the time, Amazon was just starting to produce more than $1 billion in annual revenue.
However, the stock languished for much of 2001.
Source: Google Finance
Had you doubled down during Amazon’s growing pains, you’d be sitting pretty today.
Of course, we don’t know which digital assets will follow similar trajectories. What we do know is if you believe in something, there’s logic in doubling down when others are afraid, if not outright hysterical. Just make sure you have your ducks in a row first.
Brush Up On Your Personal Finance. The only thing reckless about investing in crypto – or any other asset for that matter- is doing it at the expense of your personal financial health.
Before investing money, make sure you have cash saved in an emergency fund and for rainy day expenses, such as a flat tire. Before you go all-in on any of that, ensure you’ve eliminated high-interest debt, particularly from credit cards and personal loans.
You want to invest from a position of financial stability, if not strength. The last thing you want to do is stake your life savings on any one asset – stock, crypto or otherwise.
Diversify. Some of those early Amazon investors might have only owned Amazon. In the rearview mirror, this was a good choice. However, it doesn’t usually work out this way.
Hedge yourself. If you think Bitcoin will recover and hit $100,000, fantastic. Go for it. However, consider how you’d like to be positioned if you’re wrong. Diversify your investing across asset types (e..g, crypto, stocks, ETFs, cash) and sectors (e.g., tech, energy, consumer goods and services) without putting too many eggs in one basket.
This approach makes volatility easier to stomach.
Set It And Forget It. Long-term investors have an advantage. If you don’t need your money right away, you have more time to ride out the market’s inevitable ebbs and flows.
In fact, if you set your investing to auto-pilot by automatically investing as much as you can afford at regular intervals (this is called dollar cost averaging), you’ll buy more shares when prices are low and fewer shares when prices are high.
You’re running a marathon. Building an empire. Not sprinting in a frantic race against the clock.
The Bottom Line: As crypto crashes and struggles to recover, you might think you’ve done something wrong.
While it always helps to reassess your situation and rebalance your portfolio, there’s no need to overreact by abandoning crypto. The scary headlines are just that – scary headlines of the day, chronicling a moment in time.
If you have cash on hand, consider using it to get your personal finance in order, seize opportunity, double down on your biggest convictions, and diversify your holdings across the investing universe so you’re better able to weather these storms as they come.
News & Insights
Want to get content like this directly to your inbox? Then we urge you to sign up for our newsletter here