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FTX Collapses While 75% of Bitcoin Investors Have Lost Money

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Study Finds 75% of Bitcoin Investors Have Lost Money

According to a study published Monday, roughly 75 percent of people who purchased bitcoin lost money as the cryptocurrency sector reels from the collapse of FTX, which has sapped confidence.

Economists at the Bank of International Settlements, widely regarded as the central bank of central banks, examined data on cryptocurrency investors in 95 countries between 2015 and 2022.

“Overall, back-of-the-envelope calculations indicate that roughly three-quarters of users have lost money on their bitcoin investments,” the researchers wrote in their study.

During the study period, the price of bitcoin increased from $250 in August 2015 to nearly $69,000 in November 2021. It is now worth around $16,500.

During the same time period, the number of people using smartphone apps to buy and sell cryptocurrencies increased from 119,000 to 32.5 million.

“Our analysis has revealed that, globally, bitcoin price increases have been linked to increased entry by retail investors,” the researchers wrote.

Furthermore, they discovered that “as prices rose and smaller users bought bitcoin, the largest holders (the so-called ‘whales’ or ‘humpbacks’) sold, making a profit at the expense of the smaller users.”

The researchers lacked direct data on individual investors’ gains and losses. However, they were able to extrapolate based on the price of bitcoin when new investors began using cryptocurrency trading apps and the roughly $20,000 it was worth last month.

The study also discovered that men under 35, commonly identified as the most “risk-seeking” segment, made up roughly 40% of new cryptocurrency investors.

Researchers discovered that most cryptocurrency investors viewed it as a speculative investment and that young men were more active in trading in the months following a significant increase in the bitcoin price.

According to them, the increase in investors following price increases should raise questions about whether more consumer protection is required.

Regulators Circle FTX

Following the spectacular collapse of a cryptocurrency exchange last week, regulators launched investigations. On Monday, FTX and rival exchanges sought to reassure nervous investors about their own stability, weighing on cryptocurrencies.

The collapse of FTX, once a crypto industry darling with a $32 billion valuation as of January, has prompted investigations by the US Justice Department, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, according to a source familiar with the investigations.

According to a second source with knowledge of the investigation, the SEC investigation is also targeting FTX executives, their knowledge of handling customer funds, and any potential violations of securities laws.

While the crypto industry has marketed digital assets as fundamentally different from traditional finance, the sector has proven to be vulnerable to the same risks and should be subject to the same regulations, according to Federal Reserve Vice Chair Lael Brainard on Monday.

“Crypto finance, because it is no different than traditional finance in terms of the risks that it exposes,” she told Bloomberg in an interview, echoing a long-held belief.

Separately, the Fed’s top regulatory official, Michael Barr, hinted on Monday that stricter oversight of cryptocurrencies is on the way. This includes “safeguards” to ensure crypto companies follow the same rules as other financial firms, according to Barr’s written testimony released ahead of his appearance before the Senate Banking Committee on Tuesday.

The committee’s Democratic chairman, U.S. Senator Sherrod Brown, spoke out.

“My focus has always been on the crypto industry’s fraud, scams, volatility, and outright theft,” he said. “FTX’s bankruptcy and numerous other recent instances of insecurity have demonstrated why we require a comprehensive regulatory approach that protects consumers.”

Study Finds 75% of Bitcoin Investors Have Lost Money, FTX Collapses

FTX Files for Bankruptcy

On Friday, FTX filed for bankruptcy in one of the most high-profile crypto meltdowns after frenzied traders withdrew $6 billion from the platform in 72 hours and rival exchange Binance abandoned a rescue deal.

According to a New York Times interview published on Monday, FTX’s former CEO, Sam Bankman-Fried, said his company had grown too quickly.

Bitcoin fell below $16,000 early Monday before recovering to trade at $16,401, up 0.56% at 5:56 p.m. EST (2256 GMT).

The sudden demise of FTX, once a saviour for struggling crypto firms, sent shockwaves through the crypto industry, bracing for more damage.

LedgerX LLC, an FTX subsidiary, withdrew its December request to the Commodity Futures Trading Commission to offer products that are not fully collateralized on Monday.

BlockFi, a cryptocurrency lender, said it has significant exposure to FTX after signing a deal with it to provide it with a $400 million revolving credit facility with an option to buy it for up to $240 million.

Other cryptocurrency exchanges have published details of their reserves and promised additional disclosures to calm investor nerves amid unverified rumours.

Kris Marszalek, CEO of Singapore-based crypto exchange Crypto.com, which made headlines in 2021 with a $700 million deal to rename Los Angeles’ Staples Center the Crypto.com Arena, refuted suggestions that the company was in trouble.

Study Finds 75% of Bitcoin Investors Have Lost Money, FTX Collapses

Missing Money

Marszalek stated in an “ask-me-anything” YouTube Livestream that the exchange always kept reserves to match every coin customers held on its platform and that an audited proof of Crypto.com’s reserves would be published within weeks.

The move came after investors took to Twitter over the weekend to question a $400 million ether token transfer to the Gate.io exchange on Oct. 21.

On Sunday, Marszalek tweeted that the ether had been recovered and returned to the exchange, but the Wall Street Journal reported that withdrawals at Crypto.com had increased over the weekend.

A Crypto.com spokesperson declined to comment whether the platform’s outflows continued on Monday.

Crypto.com is one of the top ten exchanges in turnover worldwide, but it is smaller than FTX and market leader Binance.

On Sunday, Kraken, another cryptocurrency exchange, announced on Twitter that it had frozen the accounts of FTX, affiliated crypto trading firm Alameda Research, and their executives.

“We have actively monitored recent developments with the FTX estate, are in contact with law enforcement, and have frozen Kraken account access to certain funds we suspect to be associated with FTX-related ‘fraud, negligence, or misconduct,” a Kraken spokesperson said.

Changpeng Zhao, the CEO of Binance, the world’s largest cryptocurrency exchange, stated that he plans to establish an industry recovery fund to assist projects that are “otherwise strong but in a liquidity crisis.”

Binance signed a nonbinding letter of intent to buy FTX’s non-US assets last week but backed out, causing the company to go bankrupt. Zhao has since issued a warning about a “cascading” cryptocurrency crisis.

Geoff Thomas is a seasoned staff writer at VORNews, a reputable online publication. With his sharp writing skills and deep understanding of SEO, he consistently delivers high-quality, engaging content that resonates with readers. Thomas' articles are well-researched, informative, and written in a clear, concise style that keeps audiences hooked. His ability to craft compelling narratives while seamlessly incorporating relevant keywords has made him a valuable asset to the VORNews team.

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Britain Must Be Ready for War in 3 Years, Warns New Army Chief

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Britain Must Be Ready for War in 3 Years, Warns New Army Chief

The new head of the Army has stated that Britain must be prepared to fight a war within three years.

Gen Sir Roland Walker has issued a warning about a variety of risks in what he calls a “increasingly volatile” environment.

However, he stated that war was not inevitable and that the Army had “just enough time” to prepare to prevent conflict.

He stated that the Army’s fighting capacity would be doubled by 2027 and tripled by the end of the decade.

Gen Walker warned that the Britain was under threat from a “axis of upheaval” in his first speech as Prime Minister on Tuesday.

Among the primary concerns confronting the Britain in the next years, as noted by the general in a briefing, is an enraged Russia, which may seek vengeance on the West for helping Ukraine, regardless of who wins the war.

He stated: “It doesn’t matter how it finishes. I believe Russia will emerge from it weaker objectively – or completely – but still very, very dangerous and seeking some form of retaliation for what we have done to assist Ukraine.”

Britain’s Government Defence Review and Military Challenges

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He also warned that China was determined to retake Taiwan, and Iran was likely to seek nuclear weapons.

He stated that the threats they posed may become particularly acute in the next three years, and that these countries had formed a “mutual transactional relationship” since the war in Ukraine, sharing weaponry and technology.

However, he stated that the path to conflict was not “inexorable” if the UK re-established credible land troops to assist its deterrent strategy for avoiding war.

In his speech, he described his force of slightly over 70,000 regular troops as a “medium-sized army” and made no direct call for additional resources or men.

However, he pushed the British Army to adapt swiftly, focussing on technology such as artificial intelligence and weaponry rather than numbers.

His ultimate goal is for the Army to be capable of destroying an opponent three times its size.

This would entail firing quicker and farther, he said, aided by lessons learnt from the Ukraine war.

The general’s speech at the Royal United Services Institute land warfare conference comes only one week after the government began a “root and branch” defence review to “take a fresh look” at the challenges facing the armed services.

Defence Secretary John Healey launched the assessment, describing the existing status of the armed forces as “hollowed-out” and stating that “procurement waste and neglected morale cannot continue”.

According to the most recent Ministry of Defence (MoD) numbers from April 2024, the Britain’s regular Army forces total 75,325 troops (excluding Gurkhas and volunteers).

That figure has been declining in recent years, as recruiting has failed to match retention. The previous Conservative administration lowered the planned headcount from 82,000 to 72,500 by 2025.

Members of the NATO military alliance have agreed to spend at least 2% of GDP on defence by 2024, but several countries are unlikely to fulfil this goal.

The Britain presently spends 2.3% of its GDP on defence. Prime Minister Sir Keir Starmer has previously stated that the defence review will include a “roadmap” for increasing this to 2.5%, however he has yet to provide a date for this promise.

Source: BBC

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Katie Ledecky Hopes For Clean Races At Paris Olympics In The Aftermath Of The Chinese Doping Scandal

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ledecky

PARIS — Katie Ledecky is looking for clean Olympic races. On Wednesday, Hope had pretty much reached her limit.

The American swimmer hopes to add to her six gold medals as she competes in the 400, 800, and 1,500 meters at the Paris Games. Her program starts with the heavy 400 on Saturday, featuring Ariarne Titmus and Summer McIntosh.

ledecky

Katie Ledecky | ESPN Image

Katie Ledecky Hopes For Clean Races At Paris Olympics In The Aftermath Of The Chinese Doping Scandal

The 27-year-old Katie is competing in her fourth Summer Olympics, but the first since a doping scandal involving almost two dozen Chinese swimmers who tested positive for a banned chemical before the Tokyo Games — yet were permitted to compete with no consequences. The controversy has raised serious worries regarding the effectiveness of anti-doping initiatives.

ledecky

Katie Ledecky | Vogue Image

“I hope everyone here is going to be competing clean this week,” Ledecky claimed. “But what truly counts is, were they training cleanly? Hopefully this has been the case. Hopefully, there has been worldwide testing.”

The International Olympic Committee has expressed concern over the ongoing US investigation into possible doping by Chinese swimmers. While awarding the 2034 Winter Olympics to Salt Lake City on Wednesday, the IOC urged Utah officials to do whatever they could to stop the FBI investigation.

“I think everyone’s heard what the athletes think,” Katie added. “They seek transparency. They want more answers to the remaining questions. At this point, we are here to race. We are going to race whoever is in the lane next to us.

“We are not paid to conduct the tests, so we trust those who follow their regulations. That applies both today and in the future.

 

ledecky

Katie Ledecky | ESPN Image

Katie Ledecky Hopes For Clean Races At Paris Olympics In The Aftermath Of The Chinese Doping Scandal

SOURCE | AP

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London Heatwave Alert: High Temperatures Set to Soar to 29C Next Week

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London Heatwave Alert High Temperatures Set to Soar to 29C Next Week

As the summer holidays begin, London may experience an official heatwave with temperatures reaching up to 29 degrees Celsius.

The Met Office predicts a long period of sunny and dry weather for London after a soggy spring and summer.

After a cloudy day on Saturday, temperatures are expected to reach 27C on Sunday, with lots of sunlight.

On Monday and Tuesday, temperatures are forecast to peak at 29 degrees Celsius. Monday is forecast to offer more sunlight, while Tuesday may see some gloomy weather.

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Temperatures are expected to remain in the high 20s next week, with lows of approximately 18C.

According to the Met Office, a heatwave is “an extended period of hot weather relative to the expected conditions of the area at that time of year, which may be accompanied by high humidity.”

In the United Kingdom, a heatwave is proclaimed when daily temperatures meet or surpass a certain level for at least three consecutive days.

In London, the heatwave threshold is 28 degrees Celsius.

The Met Office reported that the UK is experiencing hotter and wetter weather on average due to climate change.

The UK experienced its warmest May and April on record this year, despite damp and dismal conditions in many areas.

According to the Met Office’s State Of The UK Climate 2023 report published on Thursday, the UK experienced historic levels of extreme weather last year.

In the United Kingdom, 2023 was the second warmest year on record, bringing storms, flooding, strong heatwaves, and rising sea levels; only 2022 was warmer.

It was 0.8°C higher than the average from 1991 to 2020, and 1.66°C higher than the 1961 to 1990 average.

However, 2023 will be a “cool year” in comparison to 2100, based on the planet’s warming trajectory.

The government’s plan to adapt to the hazards presented by climate change is currently being challenged in the High Court by campaigners who allege the Tory administration’s July 2023 National Adaptation Programme (NAP) fails to adequately address 61 concerns.

Source: The Standard

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