FTX Collapse: Whales Cash Out, Small Investors Buy Up Crypto
• The collapse of the giant cryptocurrency exchange FTX has been beneficial for industry competitors, as trading on major exchanges boomed after the incident.
• According to the Bank for International Settlements (BIS), whales on big exchanges like Binance, FTX and Coinbase may have exited the platforms „at the expense of smaller holders“ by cutting down their Bitcoin (BTC) holdings as retail investors went on a buying frenzy.
• Analysts had evaluated the number of downloads of cryptocurrency investment applications, which revealed that approximately three-quarters of users had downloaded an app when BTC was above $20,000.
FTX Collapse Was A Boom For Other Exchanges
The collapse of the giant cryptocurrency exchange FTX has been beneficial for industry competitors, as trading on major exchanges boomed after the incident. According to a research conducted by Bank for International Settlements (BIS), whales on big exchanges such as Binance, FTX and Coinbase may have exited these platforms at “the expense of smaller holders” by cutting down their Bitcoin (BTC) holdings as retail investors went into a buying frenzy.
Whales On Giant Exchanges Cashed Out
On one hand, while prices tumbled all users traded more but whales sold whereas skrill bought. This implies that while one cohort reduced its stockpiles another increased theirs for a quick profit using the ‘buy the dip’ principle. On this note, BIS pointed out in its report that analysts had evaluated the number of downloads of cryptocurrency investment apps which revealed that approximately three-quarters of users had downloaded an app when BTC was above $20,000.
Retail Investors Flocked To Cryptocurrencies
With whales from giant exchanges cashing out retail investors flocked to buy cryptos meaning while one cohort reduced its stockpiles another increased theirs for a quick profit using buy-the-dip principle. In this regard BIS noted in its report that analysts had evaluated number downloads cryptocurrency investment applications which revealed that around three quarters users had downloaded app when BTC was above $20K.
Crypto Shocks And Retail Losses
In February 20 newscast ‚Crypto Shocks and Retail Losses‘ BIS reported that price big market cap cryptos like Bitcoin (BTC) and Ethereum (ETH) among others plunged in 2022 however amount daily active users exchanges such Coinbase and Binance skyrocketed news FTX fiasco reached investor’s ears with many trying weather storm converting investments stablecoins other tokens appeared looked stable promising around time period .
Conclusion
Overall it can be concluded from BIS research that large investors sold off their crypto assets during market downturns while retail investors took advantage them buying low prices potentially turning profits later date when prices rose again.