The crypto market lost more than $650 billion after Terra’s implosion in May, 2022, and another $200 billion after FTX’s bankruptcy in November, the report said.
The report found that, while most crypto app users worldwide lost money on their bitcoin holdings after last year’s collapses of the Terra ecosystem and the FTX exchange, investors outside of major economies took the biggest hit.
In the world of cryptocurrency, investors have been known to lose large sums of money in risky investments. For example, in May of 2022, the crypto market collapsed following the bankruptcy of Terra, resulting in a loss of more than $450 billion. Another example is the bankruptcy of FTX in November of the same year, which caused investors to lose $200 billion.
The BIS, an institution owned by central banks, analyzed data from crypto exchange apps for 95 countries and on-chain data on the daily distribution of bitcoin in order to better understand this phenomenon.
The median investor would have lost $431 by December 2022, corresponding to almost half of their total $900 in funds invested since downloading the app. Notably, this share is even higher in several emerging market economies like Brazil, India, Pakistan, Thailand and Turkey.
If investors continued to invest at a monthly frequency, over four fifths of users would have lost money,” the report said. The authors of the report assumed users invested in bitcoin “on the same day they downloaded the app.”
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