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Crypto Investors Pocketed $37.6 Billion in Profits in 2023 Despite Market Volatility

In a year marked by market volatility, cryptocurrency investors managed to secure impressive gains, totaling $37.6 billion in 2023, according to data from Chainalysis. These profits came as a welcome relief, offsetting some of the losses suffered during the bearish conditions of 2022.

The Chainalysis report revealed that investors experienced gains in ten out of the twelve months of 2023, with only August and September witnessing losses. The downturn in August, characterized by Bitcoin’s largest monthly loss of 11.28%, triggered a broader market slump, with Bitcoin plunging to the $25,000 range, prompting investors to hedge against further declines.

Although August and September saw losses amounting to $1.5 billion and $1.4 billion respectively, gains in other months, particularly in Q4 2023, more than compensated for these setbacks. Bitcoin’s three consecutive months of positive performance from October to December, culminating in a 45% surge and closing the year above $42,000, played a significant role in driving profits.

Notably, over 51% of the total gains in 2023, approximately $19.5 billion, were generated in the fourth quarter alone, with December standing out as the month with the highest gains at $8.5 billion.

Despite the impressive gains, they fall short of the staggering $159.7 billion witnessed during the 2021 bull run. Chainalysis attributed this disparity to investors’ preference for holding onto their assets in anticipation of further price surges, as the anticipated bull run had not yet materialized by 2023.

Comparatively, 2022 proved to be a challenging year for investors, with losses amounting to $127 billion due to various crises and market downturns, including the Terra and FTX implosions.

However, the gains in 2023, while not fully offsetting the losses of the previous year, indicate the potential for significant contributions amidst the ongoing bull run. Chainalysis also noted that U.S. investors led in profit-making, with $9.6 billion, followed closely by the U.K. at $1.39 billion.

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