Cryptocurrency crash’s effects on different types of investors.
Markets were certainly shaken by the May crash, which disappeared billions of dollars from investors. Most cryptocurrency institutions declared bankruptcy due to insolvency and filed for various chapters of bankruptcy.
As a result of the cryptocurrency crash, Bitcoin’s value fell from its peak to its lowest point. Around 70% of the cryptocurrency’s value was lost, and the price dropped below $20,000.
There was a difference in severity between different types of investors in the cryptocurrency market during the cryptocurrency crash. Stable HODLS (Cryptocurrency holders are also called HODLS) and unstable HODLS, who sold their cryptocurrency holdings, are the two main types of investors.
The position of Stable HODLS!
Investing in HODLS is likely to produce a stable return if the investor is wealthy and has a good income, according to a study. Due to the cryptocurrency market crash, only 28% of investors in this category sold a small amount of their investments.
The rest of the HODLS, however, were pretty stable about the current market scenario, believing that the bearish market won’t last long and that the bullish market will soon follow.
According to a similar study above, high-income investors and people who lack financial conditions fall under the Unstable HODLS segment. According to the study, approximately 65% of the investors from this segment sold their holdings to maintain their diminishing financial situation.
Why do investors refrain from investing in digital assets? Let’s find out!
There was also a study done in which it was determined why general lower middle-class people don’t enter the cryptocurrency market. It is interesting to note that the study revealed that the main reason for people staying away from the digital asset market is not its volatility.
Their financial condition did not allow them to support their investments in the cryptocurrency market as some of them believed that bitcoin was not legitimate. Some of them pointed out the volatility of bitcoin.
Cryptocurrencies and other digital assets, for that matter, are highly popular among the wealthy, but not so much among middle-class individuals. Millennials, particularly wealthy ones, have been observing that they are investing a lot of time and money in bitcoin and altcoins.
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