Most investors have negative opinions about the bear market. Users with recent acquisitions frequently find themselves in the red relative to their initial investment when the net worth of their portfolios vanishes. Yet, for other investors, the bear market of 2022 seemed to have been a boom. These are individual investors that want to acquire at least one Bitcoin. When Bitcoin reached its all-time high of $69,000 in November 2021, there were just over 800,000 wallets with a balance of at least 1 BTC, according to the most recent statistics from crypto analytics company Glassnode.
Despite sharp price declines over the previous 15 months, this number has dramatically climbed to over 980,000. The untimely collapse of FTX, one of the biggest cryptocurrency exchanges in the world, which denied its users access to deposits worth billions of dollars in cryptocurrencies, is primarily to blame for this increase.
FTX Collapse Scarred the Market Severely
Investors’ faith in establishments was severely damaged by the collapse of FTX, which is what caused the quick transition to privately controlled cryptocurrencies. Currently, there are 2.275 million Bitcoin held by exchanges, down from 2.53 million prior to the suspension of FTX withdrawal operations.
Yet, the FTX collapse just expedited a preexisting tendency. Retail investors who were persuaded by the promise of cryptocurrencies definitely took advantage of the bear market in 2022 to buy at least one Bitcoin for the first time. In other words, it’s obvious that these investors bought the dip. And if the rate of increase in the number of wallets containing at least 1 BTC keeps up, it will probably pass the million mark in a few months.
The collapse of a cryptocurrency exchange can have significant implications for the market and its participants. When an exchange collapses, it can lead to a loss of funds for users who were holding their assets on the exchange, potentially causing them to lose faith in the overall cryptocurrency market. This loss of confidence can lead to a decrease in trading volume and lower prices for digital assets.
Furthermore, the collapse of an exchange can also have a ripple effect on other exchanges and the broader market. It can create a climate of uncertainty and fear among investors, potentially causing panic selling and a market downturn.
In addition to these immediate impacts, the collapse of an exchange can also lead to increased regulatory scrutiny and calls for tighter oversight of the cryptocurrency industry. This can have long-term implications for the market and its participants, potentially leading to increased regulations and restrictions that can limit the growth and adoption of cryptocurrencies.
Overall, the collapse of an exchange is important because it can have a significant impact on the market and its participants, potentially leading to a loss of funds, decreased trading volume, and increased regulatory scrutiny.
Holders might Affect the Price of Bitcoin
2022 showed that a rise in the price of BTC is not always accompanied by an increase in the quantity of Bitcoin wallets with a deposit of at least one BTC. In reality, recent developments indicate that the amount of wallets with a balance of at least one Bitcoin is more likely to reach 1 million if the price of the cryptocurrency declines.
It may be considered negative, or at least a headwind to the price, if this group continues to feel the urge to transfer their assets into smaller wallets as the price of BTC rises. Yet, if investors with a “HODLer” attitude make up the majority of this group of people who hold at least one Bitcoin, this may not be good for the price of Bitcoin.
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