Bitcoin giveth, and bitcoin taketh away--especially when it comes to minting fortunes.
The number of addresses with a bitcoin balance of at least $1 million totaled 87,953 as of Wednesday, down 24% from 116,139 Oct. 28, 2021, according to Finbold (Finance in Bold) news service.
Of those totals, the number of addresses with balances of at least $10 million fell 32% to 7,008 Wednesday from 10,319 in October.
The culprit for all these people losing their wealth, of course, was bitcoin’s slide. It dropped 39% to $36,852 Wednesday from $60,767 on October 28.
The lesson here is that when you invest in speculative assets, you can lose money just as easily as you make it.
Some of the arguments advanced by bitcoin advocates have been challenged by the digital currency’s drop over the past three months. For example, advocates say bitcoin can provide a hedge against inflation and against declines in other financial assets, such as stocks.
But bitcoin’s recent slide has come amid news that U.S. consumer prices soared 7% last year. And bitcoin has plummeted in synch with U.S. stocks this year, with bitcoin falling 23% year to date and the S&P 500 descending 7%.
To be sure, bitcoin bulls are unbowed.
Cathie Wood’s Ark Investment Management sees bitcoin breaking the $1 million barrier by 2030.
That would represent an increase of 27 times its recent level of $36,881
“As bitcoin’s market capitalization hit an all-time high in 2021 [over $1 trillion], Ark’s research indicated that its network fundamentals remained healthy,” Ark analyst Yassine Elmandjra wrote in a report.
“Bitcoin’s market capitalization still represents a fraction of global assets and is likely to scale as nation-states adopt [it] as legal tender.”
Institutional investors are moving into bitcoin, Elmandjra says. “Bitcoin’s institutional holder base appears to be broadening after the launch of more regulated products and adoption by corporations and nation-states.”