Most Bitcoin Retail Investors Lost Money In The Last Seven Years: Report

According to new data from the Bank for International Settlements, the major crypto crises of 2022 led to an increase in retail crypto trading, but the data also indicates that large investors sold their assets at the expense of smaller investors who were attempting to diversify their assets after moments of crisis. 

The report from BIS emphasizes the need for better investor protection in the crypto space and reiterates previous calls for global coordination in regulating digital assets, warning against increased exposure to the global financial system.

The report suggests options such as banning specific crypto activities, containing crypto, regulating the sector, or a combination of these to promote market integrity, investor protection, and financial stability.

An analysis of retail investor returns on bitcoin from 2015 to 2022 found that the median retail investor lost about half their investment by the end of 2022, despite the major jump in price that occurred from 2015 to 2021.

The study found that the price of the original cryptocurrency led to spikes in users across platforms, with daily active users increasing from 100,000 to more than 30 million between August 2015 and November 2021.

However, the report suggests that most global investors have likely lost money on their crypto investments, and concerns remain around market manipulation and insider trading in digital assets, especially after the collapses of Terra, Luna, FTT token, and FTX exchange in May.

During those crises, daily active users spiked on major exchanges Binance, Coinbase, and FTX, as users tried to adjust their portfolios away from tokens under stress towards other cryptoassets, including asset-backed stablecoins.