A bitcoin symbol on a plane of glass next to HK Bitcoin ATM and two people standing down a hall in the background.

According to new research from one of the world's leading central bank institutions, around three quarters of new investors have lost money when they put their funds into the greatcryptocurrencies.

A working paper from the Bank of International Settlements found that most people lost money on their initial investment in the digital currency. Turkey, Singapore, the UK, and the U.S. made up most of the people who bought intocryptocurrencies.

The main segment of new investors are young men under the age of 35. Even more fascinating is the fact that those new to the idea ofcryptocurrencies aren't getting involved because of any high-minded ideals of decentralization or breaking away from big banks, but because they're hoping to make bank after being suckered in with promises of big returns for little effort

The working paper might not do anything except confirm your own biases. The report assumed that a user purchased the virtual currency when they downloaded it. The economists found that a majority of users downloaded the app when the price of the virtual currency went over $20,000. A median investor would have lost 42% of their investment if a user bought $100 worth of the virtual currency in the months that followed.

The study focuses on two major events that helped to inform its conclusions.

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After China made it nearly impossible to mining in the country, many miners moved on to other countries with the promise of cheap electricity. Riots broke out in January due to rising fuel prices and electricity shortages. According to reports, the government took 15% of miners offline. The real horror of those days was that it also sent the prices of the digital currency tumbling.

The report said that there were far fewer people looking to adopt the virtual currency after China and Kazakhstan. The China event resulted in a 39% drop in prices and a 30% decrease in users. New users in the country were down by 15%. The correlation between prices and new users appears to be the same as before.

The people who hold a lot of bitcoin, the so-called "whales" or even the "humpbacks" tend to sell when the price goes up. All those smaller investors flooding the markets are just fodder for the real bitcoin bulls to sell their stock and make a lot of money.

According to the research, the percent of addresses that make a profit has reached a two year low.

The narrative that users need to get in quickly is pushed by the exchanges. There was a time when the price of cript was rising rapidly. A Superbowl ad with the slogan "Fortune favors the brave" was one example of a big name actor pushing the "line go up" narrative. More and more investors are withdrawing their funds from the site due to the fact that its reserves are mostly made up of junk coins. The entire exchange blew up last week after the FTX ad featuring Larry David made the case that you don't want to miss out on the future that is decentralization.

The need to break away from the power of big banks was a topic of discussion. The economists at the Bank of International Settlements made it very clear.

The search for a store of value or distrust in public institutions is one of the reasons why users are drawn to the virtual currency.

There would be a lot of opposition to moving from less centralized proof-of-work to completely centralized proof-of-stake if most of the investors were worried about decentralization. The author of Attack of the 50 FootBlockchain put it in a recent post, "Decentralization is always fake"