Trading on major exchanges spiked following collapse of Terra, FTX: BIS report

A study from the Bank for International Settlements (BIS) suggested that trading enactment connected large exchanges accrued successful the days pursuing the illness of crypto firms FTX and Terraform Labs.

According to a Feb. 20 bulletin connected “crypto shocks and retail losses,” the BIS reported that portion the terms of Bitcoin (BTC), Ether (ETH), and different tokens dropped successful 2022, the fig of regular progressive users astatine immoderate exchanges including Coinbase and Binance “increased markedly” pursuing news of the illness of Terra and FTX. The slope suggested that “users tried to upwind the storm” by moving their investments into stablecoins and different tokens apt not looking bearish astatine the time.

Source: BIS

In contrast, the BIS reported that whales astatine the aforementioned exchanges “probably cashed retired astatine the disbursal of smaller holders” by reducing their BTC stockpiles arsenic retail investors bought crypto. The slope said analysts had looked astatine the fig of downloads of crypto concern apps, noting that astir 75% of users had downloaded an app erstwhile the BTC was much than $20,000 and assuming each idiosyncratic bought $100 successful BTC the archetypal period and each consequent month.

Related: BIS-funded regulator to probe DeFi introduction points similar stablecoins

“Data connected large crypto trading platforms implicit August 2015–December 2022 amusement that [...] a bulk of crypto app users successful astir each economies made losses connected their bitcoin holdings,” said the BIS report. “The median capitalist would person mislaid $431 by December 2022, corresponding to astir fractional of their full $900 successful funds invested since downloading the app.” The slope added:

“While the crypto illness whitethorn person affected idiosyncratic investors, the aggregate interaction connected the broader strategy was limited.”

The marketplace clang of 2022 has had manufacture leaders and regulators speak retired connected assorted concerns, from the deficiency of oversight astatine a large speech similar FTX to however the crypto marketplace could turn to person the imaginable to interaction accepted fiscal markets. In the United States, respective bankruptcy cases are underway for firms including FTX, Celsius Network and Voyager Digital, portion authorities person been moving guardant with transgression charges against erstwhile FTX CEO Sam Bankman-Fried.