Most retail crypto investors lost money in last 7 years, according to BIS analysis
An article has been published following the recommendation of economists at the Bank for International Settlements about three policies for global regulators and a report has been published that examines “crypto shocks and retail losses” and in this report starting included the Terra/Luna collapse and the FTX bankruptcy during which researchers analyzed retail trading. There has been a significant increase in activity.
At the time, the Bank for International Settlements noted that large and sophisticated investors were selling while small grandfathered retail investors were buying. In Stormy Seas, in the section titled ‘Whales Eat the Krill’, it was further elaborated that “there was also a pattern throughout both episodes that activity on the three major crypto trading platforms as individuals persisted”. Certainly researchers at the Bank of International Settlements note that large investors probably cashed out at the expense of smaller holders. The report also notes that “after the initial shock of the Terra/Luna and FTX collapses, whales A significant portion of bitcoin (BTC) was sold and medium-sized holders and even smaller holders (krill) increased their holdings of bitcoin. The second part of the report included Bank for International Settlements onchain data, aggregate application download statistics, and calculates metrics from exchange data to make it easy to assess whether most average retail cryptocurrency investors made a profit or spent money over the past 7 years have followed and most have lost money”.
The Bank for International Settlements also conducted a series of simulations as to how spending an average of $100 a month in bitcoins cost, further concluding that over a 7-year period, nearly all types of “most investors in the researchers’ sample would Bitcoin investments reflect the same activity stemming from the Terra/Luna fiasco, the FTX bankruptcy, and the average crypto investors losing money over the past 7 years. Researchers at the Bank for International Settlements insist that agriculture has little impact on cryptocurrency but on broader financial conditions. The retail losses and pattern still suggest to researchers there is a need for “better investor protection in the crypto space” and according to one analysis “there was a significant decline in the size of the crypto sector and so far the financial system is not being affected”. However, researchers at the Bank for International Settlements claim that if the crypto economy were “more closely integrated with the real economy”, the crypto shock could have had a far greater impact.
