Bitcoin

Bitcoin millionaires ‘drop like flies’ as FTX fallout shakes crypto market

Bitcoin tumbled more than 54 per cent in 2022

The number of bitcoin millionaires has plunged and scammers have filled their boots in the past year as the market is gripped by a ‘crypto winter’ brought on by soaring inflation and a string of high profile bankruptcies.

Nearly £1.15tn ($1.4tn) was wiped from the value of the market in 2022 as soaring inflation and rate hikes sent investors scrambling for steadier ground. The sector was dealt a fresh blow in November when Sam Bankman-Fried’s exchange FTX imploded amid allegations of fraud and misuse of customer funds.

Bitcoin, the most valuable crypto currency, plunged more than 54 per cent across the year and is currently trading at £14,168 $ (17,249) – down from over £30,000 at the beginning of the year and 75 per cent down from an all-time high in 2021.

New blockchain data analysed by CoinJournal has now revealed the amount of crypto millionaires – those with over $1m (£820k) worth of value in their wallets – fell by around 73 per cent from 90,000 to 24,000 in the period.

The data points to the scale of the carnage wreaked on retail investors with cash tied up in crypto. Analysts at CoinJournal said millionaires had “dropped like flies.”

“The on-chain data sums up what is glaringly obvious from looking at a Bitcoin price chart – that the party is over and investors are no longer dreaming of retirement off their Bitcoin holdings, in the near future at least,” said CoinJournal analyst Dan Ashmore.

“Nearly three-quarters of Bitcoin millionaires losing that status is perhaps the best piece of data of all to summarise how ugly 2022 was for investors.”

The statistics came as separate data from the firm revealed that scams had surged in the past 12 months as fraudsters picked off investors amid the downturn.

The number of breaches and hacks jumped over 27 per cent to 120 – up from 94 the previous, year according to on-chain data analysed by CoinJournal. Total value of the scams came in at £1.87bn, down from £4.37bn the year before due to the sharp slide in the market/

So-called ‘bridges’ between blockchain were the target of some of the years’ most costly, with Wormhole suffering a $320m attack in February, while the Ronin Network was drained of over $600m.

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