Hello again my dear friend 💛
Part Two: Statistical Study: The Profit Ratio of the Trader vs. the 💡Investor in the Financial Markets
Yes, this is largely true for the cryptocurrency market as well, where the profit and loss ratios vary between traders and investors based on their strategies and understanding of the market. However, due to the nature of the cryptocurrency market and its high volatility, the challenges can be greater for traders than for long-term investors.
💡 Comparison between traders and investors in the digital currency market
👈 The performance of traders in the digital currency market
Trading in the cryptocurrency market requires experience and a deep understanding of rapid fluctuations. Many traders may enter the market with the aim of making a quick profit, but the result is often repeated losses due to high volatility and high risks.
- A study from The Block (2020) showed that 90% of traders in the digital currency market lose their money, as the markets are highly volatile and it is difficult to accurately predict price movements.
- A study from "eToro" (2021): It showed that about 70-80% of cryptocurrency traders on its platform lose their money due to market instability, as success is often for professionals or those who follow thoughtful strategies.
👈 Investors' performance in the digital currency market
For long-term investors, cryptocurrencies, especially Bitcoin, have shown the ability to generate sustainable profits over years, despite market volatility.
- A study from "CoinTelegraph" (2022): It showed that investors who hold Bitcoin for periods exceeding 3 years achieve returns of up to 200% on average, demonstrating the effectiveness of the "buy and hold" strategy in cryptocurrencies.
- Glassnode analysis (2023): It showed that more than 60% of Bitcoin owners made profits when they held the currency for more than two years, despite high volatility.
👈 Time comparison
- Short-term trading: Cryptocurrency traders face the same challenges as traders in traditional financial markets, and the risks may be higher due to extreme price fluctuations.
- Long-term investment: Investors who follow long-term strategies in cryptocurrencies often make significant profits if they continue to hold the currencies during periods of high volatility.
👈 Profit and loss ratio in the digital currency market
Studies indicate that:
- Only about 10-20% of short-term traders make sustainable profits in the cryptocurrency market.
- About 60-70% of long-term investors make sustainable profits when investing in digital assets like Bitcoin and Ethereum.
👈 Reasons why investors excel in digital currencies
1. High Market Volatility: Although cryptocurrencies are highly volatile, the long-term growth has been positive for major assets like Bitcoin.
2. Scarcity and stored value: Many investors see Bitcoin as “digital gold,” which increases confidence in holding it for long periods.
3. Lower costs: Traders face high costs from high transaction fees on different networks like Ethereum, while long-term investors pay these fees only once.
🌟 Sources:
1. The Block (2020): [A Study on the Performance of Cryptocurrency Traders](https://www.theblockcrypto.com)
2. eToro (2021): [Study on the profit rates of cryptocurrency traders](https://www.etoro.com)
3. CoinTelegraph (2022): [Study on Long-Term Investing in Bitcoin](https://cointelegraph.com)
4. Glassnode (2023): [Bitcoin Investor Performance Analysis](https://glassnode.com)
💡Conclusion: Studies show that cryptocurrency traders face the same, if not greater, challenges as traders in traditional financial markets. Although crypto markets can be profitable, the trend toward long-term investing appears to be more sustainable and safer than short-term trading.
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