Cryptocurrency Investors in Emerging Economies Hit Hardest by Bitcoin Losses

02/21/2023 17:24 • Tech Ticker • 147 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

Interpret the above information:

The Bank for International Settlements (BIS) has released a report showing that users of encryption applications around the world have suffered losses from holding Bitcoin after the collapse of Terra ecosystem and FTX exchange last year. However, investors outside major economies were the hardest hit. The report highlights the collapse of Terra in May 2022, which resulted in over $450 billion disappearing 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.

The report by BIS raises concerns about the sustainability and investment risks associated with cryptocurrencies. The losses have affected a considerable number of investors globally, with middle-income investors in emerging economies such as Brazil, India, Pakistan, Thailand, and Türkiye being hit the hardest. The proportion of losses recorded in these economies was higher than in major economies, highlighting the significant risks associated with investing in cryptocurrencies in these markets.

Investors who continued to invest monthly also suffered losses, and more than four-fifths of users lost money. This trend raises serious concerns about the investment risks associated with cryptocurrencies and the need for effective risk management strategies for investors.

In conclusion, the BIS report highlights the potential risks associated with investing in cryptocurrencies in emerging economies. The report cautions investors to exercise extreme caution before investing in any cryptocurrency or related application. The report suggests that effective risk management strategies should be implemented to reduce the risk of significant loss, especially for investors in emerging economics. This study undoubtedly provides valuable insights into how the cryptocurrency market operates globally and the emerging risks associated with it.

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Cryptocurrency Investors in Emerging Economies Hit Hardest by Bitcoin Losses

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

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