Investors have discovered another arena in which to diversify their holdings of money amidst the emergence of the cryptocurrency industry. According to the BIS analysis, only a small number of individuals, known as whales and professional traders, are turning a profit from the purchase of bitcoins, while the majority of regular investors are likely losing their money.
According to a data study compiled by the Bank for International Settlements (BIS), most individual investors and dealers are likely to have suffered financial losses as a result of their participation in the purchase of bitcoins during the year 2015.
With the failures of Terra/Luna and FTX in 2022, normal traders acquired bitcoin, while whales sold their holdings, as seen in the data from BIS. This resulted in an upsurge in trading activity.
According to a statement made by the Bank for International Settlement (BIS), “These trends underline the need for stronger investor protection in the crypto ecosystem.” So, the protection of individual investors as a means of minimizing losses is emphasized by this remark.
According to the findings of this analysis, “sophisticated investors” have seen their earnings increase over the last seven years, whilst regular traders and investors have seen their funds decrease.
The fall in price of Bitcoin from its all-time high has caused the majority of cryptocurrency app users throughout the globe to leave the market. According to the data, $450 billion was lost from the cryptocurrency market when Terra and LUNA collapsed in May 2022, and subsequently, another $200 billion was lost when FTX went bankrupt in November 2022. Both of these failures occurred in May 2022. The market saw a significant exodus of investors as a result of both big crises.
At the time of this writing, the price of Bitcoin is trading at around $24,600, which is a decrease of almost 64% from its all-time high of $68,789. In addition, the total value of the cryptocurrency market is now above $1.1 trillion.
Compiled by Coinbold