Retail crypto sees more new users when Bitcoin prices rise: BIS report
A rise in Bitcoin prices is the most important factor for a significant increase in the number of new investors, instead of distrust in public institutions, dislike for traditional banks, or search for a store of value, according to a report by the Bank for International Settlements (BIS).
See related article: Bitcoin hits lowest price in two years as Binance cancels FTX acquisition
Fast facts
Users are typically active on crypto exchange apps after Bitcoin prices rise, revealed a “BIS working papers” report published on Nov. 14. Bitcoin is the largest cryptocurrency by market capitalization.
About 40% of these new users are men under 35 years old, commonly identified as the most “risk-seeking” segment of the population who are more sensitive to changes in Bitcoin prices compared to women or older users.
“The price of Bitcoin remains the most important factor when we control for global uncertainty or volatility, contradicting explanations based on Bitcoin as a safe haven,” the report said.
BIS said its findings raise concerns that the general public or retail investors are not fully aware of the risks involved in the crypto sector.
Bitcoin was trading at US$16,909 at 4.30 p.m. Hong Kong time on Tuesday, up almost 1 per cent in the last 24 hours, after it fell to a two-year low of US$15,682 last week following the FTX debacle.
See related article: Retail investors shouldn’t invest in crypto: Singapore’s deputy PM