Whales Cash Out as Retail Investors Rush In: BIS Report

• The collapse of the giant cryptocurrency exchange FTX has been good for industry competitors, as trading on major exchanges boomed after the incident.
• According to research by 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.
• The BIS reported that while the price of big market cap cryptos like Bitcoin (BTC) and Ethereum (ETH) plunged in 2022, the amount of daily active users on exchanges like Coinbase and Binance skyrocketed and retail investors flocked to buy crypto.

FTX Collapse Boosts Other Exchanges

The collapse of the giant cryptocurrency exchange FTX has been beneficial to other exchanges in the industry. According to recent research by Bank for International Settlements (BIS), large and sophisticated investors sold while smaller retail investors bought after the Terra Ecosysten and FTX bankruptcy incidents. This indicates that whales from big exchanges cashed out their Bitcoin (BTC) holdings at the expense of smaller holders as retail investors seized this opportunity for quick profits using ‘buy-the-dip’ strategies during this period.

Increased Crypto Trading Activity

A data set from BIS reveals that there was an increased crypto trading activity in response to FTX’s bankruptcy. This was reflected in a surge in downloads of investment apps when BTC was above $20,000 per coin, indicating heavy user participation during this period. Similarly, users tried to weather such storms by converting their investments into stablecoins or other tokens which were deemed more secure investments around that time.

Whales Cashed Out On Big Exchanges
The research also found that whales from large exchanges such as Binance, FTX and Coinbase cashed out their Bitcoin holdings while retail investors took advantage of this situation to purchase crypto assets at lower prices due to falling market prices during this time. This implies that one cohort reduced its stockpiles while another increased theirs quickly with gains made from ‘buying the dip’ strategies used during these periods.

Retail Losses From Crypto Shocks
In February 2023 newscast about ‚Crypto Shocks and Retail Losses‘, BIS reported that despite plunging market caps for cryptos like BTC, ETH etc., daily active users on popular exchanges grew significantly due to news about FTX’s bankruptcy being circulated among potential investors looking for opportunities within volatile markets .

Overall it can be concluded that despite losses faced by some participants within volatile markets such as those caused by FTX’s bankruptcy incident , there are still opportunities within these markets where informed decisions can be made if one is looking for short term gains .