Investors Suffer Losses Across the Globe Due to Cryptocurrency Collapse

02/21/2023 17:24 • AI Insights • 125 views

It is reported that the Bank for International Settlements (BIS) said in a report released on Monday that although most users of encryption applications around the world suffered losses from holding Bitcoin after the collapse of Terra ecosystem and FTX exchange last year, investors outside major economies were the hardest hit. According to the report, after the collapse of Terra in May 2022, more than $450 billion disappeared from the cryptocurrency market, and another $200 billion was lost after the bankruptcy of FTX in November. By December 2022, the middle investors will lose $431, equivalent to nearly half of the total $900 they have invested since downloading the application. It is worth noting that this proportion is even higher in several emerging market economies such as Brazil, India, Pakistan, Thailand and Türkiye. If investors continue to invest monthly, more than four fifths of users will lose money.

BIS: The collapse of FTX and Terra has hit retail crypto investors in emerging economies hardest

Analysis based on this information:

The Bank for International Settlements (BIS) has released a report on the losses of encryption application users due to the collapse of Terra and FTX exchange in 2022. According to the report, most investors suffered losses after the collapse of these exchanges, including the disappearance of more than $450 billion from the cryptocurrency market. The losses were not limited to major economies, as investors from emerging market economies such as Brazil, India, Pakistan, Thailand, and Türkiye were hit the hardest.

The report noted that by December 2022, middle investors had lost $431, which was nearly half of the total investment of $900 they had made since the application was downloaded. This proportion was even higher in several emerging market economies. If investors continue to invest monthly, more than four fifths of users will lose money.

Cryptocurrency has been gaining more popularity in recent years, with the surge in the value of Bitcoin and other digital currencies. However, despite its potential for high returns, the market remains volatile and unpredictable. The collapse of the Terra ecosystem and FTX exchange highlights the risks associated with investing in the cryptocurrency market.

The BIS report serves as a reminder for investors to exercise caution when investing in cryptocurrency. The report highlights the importance of conducting thorough research and analysis before investing in digital currencies. This includes understanding the risks associated with different types of cryptocurrency, such as their volatility and liquidity.

Investors must also consider the regulatory environment of the country they are investing in. Different countries have different regulations regarding cryptocurrency, and understanding these regulations could help investors make better investment decisions.

In conclusion, the BIS report sheds light on the risks associated with investing in the cryptocurrency market. It is important for investors to exercise caution and make informed decisions when investing in digital currencies. Thorough research, analysis, and understanding of the regulatory environment are crucial for making sound investment decisions.

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Investors Suffer Losses Across the Globe Due to Cryptocurrency Collapse

BIS: The collapse of FTX and Terra has hit retail crypto investors in emerging economies hardest

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