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The crypto industry will lose $650 billion in 2022

Recent report Bank of International Settlements (BIS) shows that after two major scandals rocked the crypto market last year, the value of the digital currency market fell by more than $650 billion.

According to Wallex and quoted by Crypto Potato, the bank’s report, which is called “Cryptocurrency Shocks and Micro-Sector Losses”, examines the trading behavior of investors during and after the two major collapses of last year and the effects of turmoil in the market. Digital currencies explain the financial system.

In the last fiscal year, the crypto market witnessed many horrific events that drove several companies into bankruptcy, wiping out more than $1.8 billion from the market.

One of these events was the collapse of the Terra-Luna network worth 40 billion dollars in May. According to the BIS report, more than 450 billion dollars were reduced from the market value following this event.

About six months later, the market’s third largest exchange – FTX exchange – went bankrupt, removing more than $200 billion from the market.

According to the report, daily user activity on cryptocurrency trading platforms increased last year as investors tried to alternately adjust their portfolios and stay away from troubled tokens.

While whales and big market players sold their holdings, small and medium holders were on the other side of the deal and increased their share of Bitcoin ownership. According to the report, the whales “probably managed to exit the market with smaller investors.”

While institutional and individual investors saw huge losses in the cryptocurrency market, the traditional financial system was not affected much by these events. The BIS report acknowledged in this regard:

Our analysis suggests that the sharp decline in the size of the digital currency market has so far not had major consequences for the broader financial system. However, if crypto becomes more intertwined with the real economy and the traditional financial system, the impact of shocks in the crypto world could be much greater on the economy.

The post Crypto industry will lose 650 billion dollars in 2022 appeared first on Wallex Blog. appeared.


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