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

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.

Interpretation of this information:

The Bank for International Settlements (BIS) recently released a report indicating that most users of encryption applications around the globe incurred significant losses from holding Bitcoin after the collapse of Terra ecosystem and FTX exchange in 2022. The report revealed that investors outside major economies suffered the greatest impacts, with emerging markets such as Brazil, India, Pakistan, Thailand, and Türkiye reporting the highest proportion of losses. The report highlighted that more than $450 billion disappeared from the cryptocurrency market after the Terra ecosystem collapse and another $200 billion was lost following the bankruptcy of FTX in November. By December 2022, middle investors were estimated to have lost $431, which is nearly half of their total $900 investment since downloading the application.

The report further suggested that if users continue to invest monthly, over four fifths of them will ultimately lose money. The findings of the report can be attributed to various factors, including the lack of regulatory oversight, limited transparency, and inadequate risk management practices within the cryptocurrency industry. As a result, investors, particularly those in emerging market economies, need to be more cautious when exploring cryptocurrency investment opportunities to avoid the risk of significant losses.