Crypto selloff – Buyers of 2021 hit as Bitcoin tests $30,000

Crypto selloff – Buyers of 2021 hit as Bitcoin tests $30,000

The Bitcoin logo atop a cryptocurrency automated teller machine (ATM) at a CoinUnited cryptocurrency exchange in Hong Kong, China, on Friday, March 4, 2022. Photographer: Paul Yeung/Bloomberg



There’s a crypto refrain when prices crash precipitously like this: The selloff is washing out the short term-focused non-believers, known as weak hands, strengthening the industry in its wake.

It’s a glib way to think of all those who had joined the market as Bitcoin’s price rose to an all-time high at the end of last year -- including institutions and small-time at-home investors, many of whom are deeply underwater on their investments now.

A measure called MVRV -- which divides market value by the average purchase price -- shows that short-term holders, on average, purchased Bitcoin at around $47,500. Another gauge, called the spent-output-profit ratio (SOPR), indicates those kind of investors are selling at a loss right now, according to an analysis by Genesis Global that uses Glassnode data.

And it’s not just those who have held the coin for a few months. More than half of traders who held crypto at the end of 2021 had gotten in that year, crypto-firm Grayscale Investments said at the time. Bitcoin’s average price in 2021 hovered around $47,300. It was near