Will Crypto bounce back?


After the sudden collapse of Sam Bankman-once-$32 Fried’s billion digital asset empire, FTX, the amount of cryptocurrency traded fell by 50%.

The average daily trading volume on centralized exchanges dropped from $26.7 billion in the week ending Oct. 30 to $13.1 billion in the week ending Dec. 11, Bloomberg reported, citing data from Kaiko. These include platforms like Coinbase, Binance, Kraken, OKX, and Bitfinex, just to name a few.

The industry is in a brutal bear market, so the trading drop is crucial. Bitcoin and ethereum are down 75% from their November 2021 record highs, according to Messari.

The collapse of FTX Crypto

“FTX’s collapse brings us back to reality,” Shaban Shaame, founder and CEO of blockchain game developer EverDreamSoft, told Insider. “Cryptocurrency is a new industry. It’s the Wild West, where everything is possible, but there are also a lot of bad people and no rules.”

After a report from Coindesk showed that the exchange’s native token, FTT, was used to prop up Bankman-quant Fried’s trading firm, Alameda Research, FTX lost $8 billion in customer deposits. The balance sheet of the trading giant, which once had $14.6 billion in assets, was mostly made up of a coin that its sister company made up. This coin was not an independent asset like fiat currency.

“Either it will be heavily regulated or less centralized. Exchanges are like banks in that people deposit money and no one checks on them. He said. Decentralized exchanges are a trustless solution, but they’re not ready for all use cases.

Shaame added, “The drop in trading shows that people are becoming aware of the mantra “not your key, not your coin” and moving to non-custodial exchanges.”

Trading volumes have plummeted as retail investors exited the bull market. SuperOne founder Andreas Christensen said. Until the next upswing, investors will be afraid.

In such a fragile bear market, a big-time crime like what SBF did with FTX will have a big effect on market sentiment and trading volumes.

Also Read: How Does The Stock Market Pay Off?

Phil Wirtjes head of strategy at digital asset trading platform Enclave Markets, says it’s not surprising that investors are “risking off” while they figure out how far the recent turmoil will spread.

A top economist at BTCM said that the FTX mess will continue to hurt the confidence of both institutional and individual investors. This will hurt the credibility of the industry as a whole, the economist said.

Institutions like Fidelity and BlackRock are still slowly but steadily pushing their digital asset initiatives, while the majority of traditional institutions are in wait and see mode.

He also said, “However, most crypto veterans are used to this kind of market drop and quietness from previous circles and are still hanging in there.”

Follow Us on Instagram 

Share this post with your friends

Leave a Comment

Copyright © 2022 AltSignals. All rights reserved.
A subsidiary of Ekana Technologies PTE. LTD. (Singapore)