by AK Arora 
The number you’ll see quoted most often — “90% of traders lose money” — is both approximately right and consistently misunderstood. The exact figure depends on what you’re measuring: new traders vs experienced ones, day traders vs long-term holders, active speculation vs passive buying.
The honest answer is that multiple studies from credible institutions — including the Bank for International Settlements, one of the most important financial research bodies in the world — have all arrived at figures suggesting the large majority of people who trade crypto lose money. Not because crypto itself is a scam. Because trading is difficult, emotional, and statistically unforgiving in ways that most people don’t account for before they start.
Here’s what the data actually shows.
The Studies, One by One
Bank for International Settlements (BIS) — 2022 working paper covering 2015-2022
The BIS analyzed crypto investor behavior over seven years and found that between 73% and 81% of new crypto investors lost money on their initial investment. The BIS is not a crypto-skeptic advocacy group — it’s the central bank for central banks, and this was a serious academic analysis. Their finding: roughly three in four people who got into crypto during this period ended up selling at a loss or holding positions worth less than they paid.
NFTEvening Survey — 1,005 retail crypto traders, August 2025
A more recent, trader-specific survey found that 84% of retail crypto traders lose money within their first year. Worse: 58% of new traders lost nearly all of their money in that first year. One in three quit entirely within six months.
This survey is self-reported, which introduces some bias — but the direction of the finding aligns with the BIS’s academic data, which wasn’t self-reported.
Gate.io research — extended period analysis
Looking at active traders on major exchanges over extended periods, approximately 10-20% of traders are consistently profitable. Which is a more useful framing than just looking at first-year failure rates: even among people who survive their early losses and keep trading, four out of five still aren’t consistently making money.
The Brazilian Day Trader Study — 300+ day threshold
This frequently-cited academic study followed Brazilian day traders who had been active for at least 300 days — people who stuck with it long enough to develop some experience. Only 1.1% were profitable at the level that could substitute for a minimum wage income. 97% of this group, after sustained effort and experience, still weren’t generating meaningful positive returns.
The “97%” figure gets thrown around loosely online, but its specific context matters: this is 97% of persistent, experienced day traders in one market. Whether it applies exactly to crypto is debatable. Whether the directional finding — that very few people consistently make money through active day trading — applies to crypto is not debatable, because every other data source says the same thing.
Why the Numbers Are So Bad
This is the more useful question. The data is consistent enough that “most traders lose money” is settled. Why this happens is where the actionable information lives.
The most common mistakes beginners make, from the 2025 survey:
Poor research drove losses for 55% of losing traders. More than half entered trades without understanding what they were buying — making decisions based on tips, social media, and price momentum rather than any analysis of fundamentals. The second most common mistake was FOMO — fear of missing out — cited by 44% of losers. Buying at price peaks because something is going up is one of the most reliably losing strategies across all financial markets. In crypto, where moves are faster and more violent, it’s especially costly.
The leverage amplifier
Active crypto trading increasingly involves derivatives — futures, perpetual contracts, margin positions. Leverage amplifies both gains and losses, and it introduces liquidation risk: forced closure of a position before the trader chooses to exit. The mechanical nature of liquidations means that many losing traders don’t just lose money gradually — they lose it suddenly and completely when a leveraged position hits its liquidation price.
In February of this year, over $3.2 billion in leveraged crypto positions were liquidated in a single 24-hour session following a geopolitical event. Many of those positions were held by traders who had the right long-term view on direction but were using leverage that couldn’t survive a short-term adverse move. Being right about the direction and still losing money is a specific feature of leveraged trading that plain loss statistics don’t fully capture. For the full mechanics of how this works, see our leverage in crypto trading explainer.
Market timing is genuinely difficult
The data consistently distinguishes between traders — people making frequent buy and sell decisions trying to profit from price movements — and holders, who buy and hold through volatility without actively trading. The BIS data covered both groups. When researchers isolate the holding behavior specifically, the loss rates are lower.
This aligns with a pattern documented across stock markets for decades: the more actively an individual trades, the worse their returns tend to be relative to simply holding an index or a quality asset over time. Transaction costs, bid-ask spreads, and the probability that a professional counterparty knows more than you about the current price all work against the active trader.
The 24/7 market without circuit breakers
Traditional stock markets close. Crypto doesn’t. This means emotional trading can happen at 3 AM when a price alert goes off, or on a Sunday when markets gap through support levels with no institutional activity to cushion the move. The ability to trade constantly is often presented as an advantage. For most retail traders, it’s a liability.
Inexperience with volatility
The magnitude of crypto price moves is genuinely unlike most other markets. A 20% weekly decline is unusual in equities. In crypto, it happens regularly enough that experienced participants have a name for it (a “healthy correction”). First-year traders who’ve never experienced a bear market — or even a sharp correction within a bull market — consistently underestimate how painful drawdowns feel in real time, and how that emotional pain drives them to sell at the worst moments. For context on what the current bear market looks like and how previous ones resolved, see our why is crypto crashing analysis.
The Distinction That Changes the Numbers
“Crypto traders who lose money” and “crypto investors who lose money” are different populations producing different statistics.
The high failure rates above apply most strongly to active traders — people making regular buy and sell decisions trying to profit from price movements.
Long-term holders have a different track record. Bitcoin has had four major bear markets. In every case, the price eventually recovered to a new all-time high. Someone who bought Bitcoin at any point before November 2020 and held without selling is sitting on a profit today, regardless of how many times they had to watch their portfolio value cut in half.
This is not a guarantee about the future. Past cycles don’t commit the market to future ones. But it’s a meaningful distinction when you’re evaluating the “most traders lose money” statistic — because whether you’re a trader or a holder changes your probability of falling into that majority significantly.
The cleanest summary of what the data shows:
Active day trading in crypto: failure rates between 73% and 97% depending on the study and timeframe measured. Long-term holding of established assets through full cycles: historically much better outcomes, though still not without significant volatility risk.
What Separates the Minority Who Don’t Lose
The data identifies this too. From the 2025 survey and broader market analysis, the characteristics that correlate with the minority of profitable traders:
Risk management before entry, not after. Profitable traders define how much they’re willing to lose before opening a position and set stops accordingly. Losing traders typically manage risk reactively — deciding whether to exit after a loss is already happening, which is when emotional decision-making dominates.
Fewer trades, not more. Every study on trader behavior finds that trading frequency negatively correlates with returns. More trades means more transaction costs, more opportunities to make emotional decisions, and more exposure to adverse price moves. The traders who survive long enough to become consistently profitable almost universally describe reducing trade frequency as part of their development.
Strategy consistency over trend-chasing. Profitable traders follow defined rules across different market conditions. Losing traders modify their approach based on what has recently worked, which tends to be a lagging indicator.
Position sizing proportional to conviction and account size. The traders who blow up accounts most spectacularly are almost always the ones who concentrated too much capital in a single trade that went wrong. Distributing risk across positions, and never risking more than a defined percentage of the total account on any single trade, is the mechanical practice that most separates survivors from non-survivors.
What This Actually Means If You’re Considering Trading
The data doesn’t say “don’t buy crypto.” It says “active day trading has very bad statistical outcomes for most retail participants.”
These are different things.
Buying Bitcoin or Ethereum and holding through a full cycle is a very different activity from day trading crypto with leverage. The statistics above apply most strongly to the latter. If you’re thinking about the former, the relevant framework is in our guide on how to think about crypto as a long-term investment and our which crypto to buy for long-term framework.
If you’re specifically interested in active trading despite the statistics, our crypto day trading guide covers the actual mechanics and the platform-specific considerations — with the same honest framing about the documented outcomes.
The most consistent finding across every study is this: the traders who lose money overwhelmingly share two characteristics. They didn’t research before entering trades. And they made decisions based on emotion rather than pre-defined rules.
Neither of those is fixed by having a better platform, more leverage, or a hotter tip. They’re fixed by approach — which is why the data looks the same across different market cycles, different exchanges, and different asset classes.
What percentage of crypto traders lose money? Multiple studies suggest 73-84% of retail crypto traders lose money, depending on the study and timeframe. Active day traders have higher failure rates — a study of persistent day traders found 97% were not profitably trading after 300+ days. Only 10-20% of active traders are consistently profitable over extended periods.
What percentage of crypto day traders lose money specifically? Day trading has the worst outcomes. The Brazilian day trader academic study found only 1.1% of traders who had been active for 300+ days earned income that exceeded minimum wage. In crypto specifically, the leverage that most day traders use amplifies losses and introduces liquidation risk that compounds the base failure rate.
Why do most crypto traders lose money? The most common causes documented in research: poor research before entering trades (55% of losers), FOMO-driven buying at price peaks (44%), emotional selling during drawdowns, overleveraged positions that can’t survive short-term volatility, and excessive trading frequency. The 24/7 nature of crypto markets and the severity of its volatility amplify mistakes that might be recoverable in other markets.
Is it possible to consistently profit from crypto trading? Yes — roughly 10-20% of active traders manage it over extended periods. The characteristics they share: strict pre-defined risk management, low trading frequency relative to their account activity, strategy consistency across market conditions, and proportional position sizing. These are not traits most people start with, which is one reason why the failure rate is highest in the first year.
For informational purposes only. The statistics cited reflect published research and surveys as referenced. Individual trading outcomes vary, and past statistical patterns do not guarantee future results.
