From 2015 to 2022, the average retail investor lost about half of the funds invested in Bitcoin, despite the price rising during that period. Analysts at the Bank for International Settlements (BIS) reached these conclusions.
A majority of #Crypto users in most countries, lured by the prospect of rising prices, have lost money on their #Bitcoin investments #BISBulletin https://t.co/NySymoUED4 pic.twitter.com/iBunYAGi5x
— Bank for International Settlements (@BIS_org) February 20, 2023
Such findings are based on the analysis of activity data from crypto platform apps and on-chain data.
The peak of interest in the first cryptocurrency came when its price hit an all-time high (about $69,000) — the global average number of active users rose from 100,000 to more than 30 million.
The crisis moments of 2022, such as the collapse Terra and FTX, worsened the situation for this category of market participants — whales used the liquidity provided by retail investors to exit their positions.
“These patterns underscore the need for [development of] a corresponding set of measures to promote market integrity, investor protection and financial stability,” the report said.
BIS again called for global coordination in the regulation of cryptocurrencies, warning of the risks of amplifying spillovers to the global financial system.
Among the proposed options are constraining the development of the industry, regulating it, or a combination of both.
In February, the organisation outlined its work plan for 2023. Among the priority tasks were ensuring the safety of the financial sector, as well as improving regulation and oversight.