Impact of the cryptocurrency crash on different types of investors.
The May crash certainly rocked the market and wiped out billions of investor dollars. Cryptocurrency institutions took a hit as many of them defaulted and various bankruptcy chapters were filed. The cryptocurrency crash was so debilitating that it derailed Bitcoin from its peak to its lowest value. The cryptocurrency lost about 70% and started trading below $20,000.
The severity of the cryptocurrency crash has been observed differently among the different types of investors in the market. Investors are broadly divided into stable HODLS (cryptocurrency holders are also known as HODLS) and unstable HODLS, which sold some of their holdings.
The position of Stable HODLS!
According to a study, it was found that investors who are wealthy and have a good income turned out to be stable HODLS. Only 28% of investors from this category have sold a small portion of their investments due to the cryptocurrency market crash. But the rest of the HODLS have been pretty stable on the current market scenario, believing that the bearish market will not last long and the bullish market will come soon.
The location of unstable HODLS.
A study similar to the one above found that those investors who are low-income and generally without financial condition fall under the unstable HODLS. The study found that around 65% of investors from this segment sold their holdings to salvage their deteriorating financial conditions.
Why are investors avoiding investing in digital assets? Let’s find out!
A study was also conducted that found why lower-middle-class people generally do not venture into the cryptocurrency market. Interestingly, the study found that the main reason for people to stay away from the digital asset market is not the volatility of the market. Many of them believe that Bitcoin is not legit, some of them pointed out the volatility and some of them continued to accept that their financial situation did not allow them to support their investments in the cryptocurrency market.
It is a fact that cryptocurrencies or any other digital assets are very popular with the rich and not so popular with the middle class. It can be observed that these affluent millennials have invested their time and money particularly in bitcoins or altcoins.