Data from a recent Chainalysis report reveals that cryptocurrency investors saw substantial gains of $37.6 billion in 2023, despite the market’s lackluster performance, offsetting losses from the previous year’s bear market.

Throughout 2023, investors experienced profits in ten out of the 12 months, with August and September being the only months that saw losses. The downturn in August, characterized by Bitcoin’s largest monthly loss of 11.28%, resulted in a market-wide slump, dragging Bitcoin down to the $25,000 range and causing losses for other assets.

Following the panic in August, investors engaged in selloffs to hedge against further declines. This trend continued into September 2023, when Bitcoin dropped below $25,000. Chainalysis data shows that investors lost $1.5 billion in August and $1.4 billion in September.

However, these losses were overshadowed by gains in other months, particularly in Q4 2023, when the market entered a pre-bull run phase. Bitcoin saw three consecutive months of gains from October to December, surging by 45% to close the year above $42,000.

Notably, the fourth quarter of 2023 alone accounted for $19.5 billion in profits, with December seeing the largest monthly gains at $8.5 billion.

While the total gains of $37.6 billion in 2023 are lower than the $159.7 billion seen during the 2021 bull run, Chainalysis noted that the market growth in 2023 was on par with that of 2021. The firm attributed the difference in gains to investors holding onto their assets in anticipation of future price surges.

Contrastingly, 2022 was a challenging year for investors, with losses totaling $127 billion due to the bear market and various crises. The ongoing bull run in 2023 has the potential to make significant contributions to offset these losses.

Chainalysis also found that U.S. investors saw the highest profits in 2023, totaling $9.6 billion, followed by the U.K. with $1.39 billion.

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