The data shows that Bitcoin holders have locked in losses totaling $213 billion over the past year.
Bitcoin Investors Lost $213 Billion in This Bear Market
According to data from the on-chain data analytics company glass knotrealized losses meant that 47% of the bull market gains are now gone.
When an investor holds any number of coins and the price of Bitcoin drops below the value at which the holder acquired said coins, the coins accrue an unrealized loss.
If the investor sells or moves these coins at this lower price, the loss incurred becomes “realized”.
“Realized Loss” is an indicator that measures the total amount of such losses blocked by holders across the entire BTC network.
Naturally, the opposite measure is called “earned profit” and tells us about the profits reaped by investors.
Now, here is a chart that shows how the yearly sums of these two Bitcoin indicators have changed over the past few years:
There seems to have been a large amount of losses locked in during the past year | Source: Glassnode on Twitter
As you can see in the chart above, the Bitcoin bull market in 2020-21 recorded a peak annual profit realization of around $455 billion.
So far, the 2021-22 bear market has seen a peak realized loss of $213 billion, which is the current value of the metric. This means that for the past 365 days, BTC holders have locked in this extremely large amount of losses.
Glassnode notes that these losses imply that there was a relative capital loss of about 47% of the gains seen during the bull market.
The graph also highlights these values for the previous cycle. It seems that the highest annual sum of profits made during the 2017-2018 bull market was around $117 billion.
And the spike in loss realization seen in the corresponding 2018-2019 bear market was around $56 billion. Interestingly, the profit and loss peaks in the current cycle as well as the previous cycle have almost exactly the same ratios.
This means that the capital loss seen between the bull and the bear in the current cycle is now at the same level as when the previous cycle bottomed out.
As of this writing, the price of Bitcoin is hovering around $16.9,000, down 1% in the past week. Over the past month, the crypto has lost 18% in value.
The chart below shows the BTC price trend over the past five days.
Looks like the value of the crypto continues to move sideways around $16.9k | Source: BTCUSD on TradingView
Featured image from Hans-Jurgen Mager on Unsplash.com, charts from TradingView.com, Glassnode.com