what is the bitcoin misery index bmi 
the bitcoin misery index bmi is a measurement of bitcoin s price action it ranges from 0 to 100 and uses contrarian economic indicators in which opportunities move opposite of conventional indicators it incorporates several different market factors such as win ratios and volatility understanding the bitcoin misery index bmi the bmi was created in 2018 by tom lee a co founder of fundstrat global advisors the index incorporates the percentage of winning trades to total trades and volatility it shows a value of zero to 100 the index indicates misery when the value is below 27 which means that traders are not happy with the results of their trades as a contrarian index the closer the index is to zero the louder the signal to buy becomes it is a buy signal because traders believe prices may not go any lower and that profitable trades are on the horizon interest in bitcoin btc increased dramatically in 2016 with btc price rising 123 by year s end by 2017 investors were pouring into btc pushing the price to just under 20 000 in december investors who expected bitcoin prices to continue their meteoric rise after december 2017 were met instead by a decline of over 50 bitcoin s popularity continued to grow through 2018 2019 and 2020 in 2021 its price skyrocketed to 69 000 in november before plummeting to around 35 000 in january 2022 1as interest in bitcoin has risen so too have threats to its stability as a result several countries have banned or created substantial regulations targeting cryptocurrencies for example china banned cryptocurrency over concerns of financial stability money laundering and fraud 2cryptocurrency investors also have to deal with the possibility that their digital assets can be stolen if stored in hot wallets digital wallets that are actively connected to cryptocurrency exchanges via the internet several exchanges have been hacked such as mt gox which lost over 450 million and coincheck which lost over 500 million the uncertainty about regulatory and security has given rise to a new misery index the bmi fundstratgoals of the bitcoin misery indexaccording to fundstrat insight the bmi is a proxy for investor sentiments about bitcoin s price action it indicates whether traders and investors are feeling happy 100 67 neutral 66 28 or miserable 27 0 about prices 3cryptocurrency trading and investing expose you to several types of risk including transaction risk interest rate risk leverage risk counterparty risk and country risk unlike trading u s dollars or euros you have to contend with other risks created by assets based on a decentralized ledger without a central bank to act as a guarantor you may have little recourse or protection if something goes awry with a cryptocurrency the highly risky and speculative nature of bitcoin investing favors those who can quickly analyze shifts in prices and understand the impact of news announcements and place buy or sell trades accordingly indexes create a tendency in investors to self fulfill prophecies if as a group investors believe when an index hits a specific level it signals an opportunity to buy then they will wait until it hits that level to start buying while indexes are sometimes helpful as early warning indicators of market sentiment they are backward looking measures the bmi cannot predict whether hackers will attack a cryptocurrency exchange it won t be able to predict whether the securities and exchange commission sec will approve a new u s based exchange or bitcoin backed security it will only tell you what other investors and traders felt at any given moment in the past 