https://www.coindesk.com/markets/2023/02/20/retail-crypto-investors-in-emerging-economies-hit-hardest-by-ftx-terra-collapses-bis/

While most crypto app users worldwide lost money on their bitcoin holdings after last year's collapses of the Terra ecosystem and the FTX exchange, investors outside of major economies took the biggest hit, the Bank for International Settlements said in a report published on Monday.

Losing money in risky investments isn't exactly a new phenomenon: Last year, American investors lost $9 trillion due to falling stock prices alone. More than $450 billion vanished from the crypto market following the collapse of Terra in May, 2022, and another $200 billion was lost following FTX's bankruptcy in November, the report said.

The BIS, an institution owned by central banks, analyzed data from crypto exchange apps for 95 countries and on-chain data on the daily distribution of bitcoin holdings collected from IntoTheBlock. The data showed that, from August 2015 to December 2022, almost three-quarters of users downloaded a crypto platform app when the price of bitcoin was above $20,000.

"The median investor would have lost $431 by December 2022, corresponding to almost half of their total $900 in funds invested since downloading the app. Notably, this share is even higher in several emerging market economies like Brazil, India, Pakistan, Thailand and Turkey. If investors continued to invest at a monthly frequency, over four fifths of users would have lost money," the report said.

The authors of the report assumed users invested in bitcoin "on the same day they downloaded the app" and that "each new user bought $100 of bitcoin in the month of the first app download and in each subsequent month." It's unclear how much these assumptions reflect reality – particularly whether downloading an app ensures the purchase of crypto.

The report also said larger investors might have benefited at the expense of smaller ones. "The price patterns suggest that larger investors were able to sell their assets to smaller ones before the steep price decline," it said.

Following the market collapse, regulators who were previously more concerned about crypto's impact on financial stability, have pivoted to setting up stronger safeguards for retail investors.

"Evidence suggests that crypto shocks have a limited impact on equity prices or broader financial conditions," the BIS report said.