Simulated Losses, Exchange-App Activity, and Bitcoin Buy-and-Hold: A Methodological Re-Examination of BIS Working Paper No. 1049 (Zenodo (CERN European Organization for Nuclear Research))

Summary

• BIS Working Paper No. 1049 assembled a Sensor Tower panel of retail crypto-exchange app downloads and daily active users (DAUs) covering 95 countries from August 2015 to June 2022.p.1
• Over the August 2015–June 2022 sample window, buy-and-hold Bitcoin yielded returns of approximately 69–71× the initial outlay, equivalent to a CAGR of about 84–85%.p.2
• Binned data behind Graph 5 show that 72.7% of crypto exchange app downloads occurred when the Bitcoin price was above $20,000.p.3
• The public supplement data underlying Graph 6 show that 81.0% of users would have lost money under a $100 monthly purchase simulation evaluated in 2022.p.3
• Demographic analysis reveals a strong concentration of app users among men under 35 years of age, representing about 40% of total users.p.4
• Replacing monthly high prices with monthly average prices in dollar-cost averaging simulations reduces the download-weighted loss share from 83.2% to 81.7%.p.7

Key insights

1. The cross-country mean DAU series in the G20 exhibits a power-law growth slope relative to Bitcoin age of 7.76 with an R2 of 0.93.p.8
2. Bitcoin's monthly mean close price relative to asset age exhibits a power-law slope of 7.35 with an R2 of 0.89 over the BIS sample window.p.8
3. Bitcoin market dominance averaged approximately 60% across the sample period, declining from 86.3% in 2015 to 39.3% in 2022.p.4