After the chaos of FTX, are we facing the end of cryptocurrencies?

If bitcoin were a boxer, it would be one that refuses to give up, despite the rejection it just received.

In recent weeks the cryptocurrency has received a beating with the collapse of industry giant FTX and the arrest of its founder, Sam Bankman-Fried, in the Caribbean.

Bitcoin is used to taking hits, but this “anti-establishment” fighter was already on the ropes after his most painful year yet.

Continuing with the simile, if the cryptocurrency were a boxer, he would be lying on his back on the canvas. Watching Estrellace.

It’s lying down, but is it finished?

From poverty to wealth

Bitcoin has a story that fits with a plot in the best style of Rocky.

When it started in 2009 it was seen as something insignificant, but until not long ago bitcoin was considered a gold mine.

When he started up in the lawless world of internet forums in 2009 he was just a featherweight prospect.

There was a spark, but only within a noisy niche of fans who were true believers and who drew almost nothing: a few cents at first.

However, over the years its promoters increased, helping to develop bitcoin and fighting the system.

The value of the cryptocurrency rose to thousands of dollars and began to be recognized and welcomed in certain places. She began to be accepted in Specialized websites or in trendy coffee shops.

Slowly, and against all odds, bitcoin became something sought-after, like a prized boxer.

Thousands of imitators also emerged such as andthereum, dogecoin and lItecoin, before bitcoin achieved extraordinary fame and value in 2021.

People invested money in it and all other cryptocurrencies. One bitcoin cost almost $70,000.

The conventional system also began to open up to the possibility of investing in it and other cryptographic projects.

But then, in November 2021, bitcoin began to suffer losses and has since continued to worsen, with continuous blows and scandals that have left it at its lowest point in years in terms of value, confidence and excitement.

“This It’s a terrible time for the cryptocurrency space and we may see even worse days after the recent FTX scandal. It’s a watershed moment for cryptocurrencies,” stated Stefen Deleveaux, president of the Caribbean Blockchain Alliance.

The FTX collapse last month has been the biggest setback for cryptocurrencies in years.

It was the second largest exchanger in the world – the entry point for millions of people to enter the world of cryptocurrencies.

She was seen as One of the most reliable platforms, but collapsed days after it was revealed that his finances were unstable.

FTX founder Sam Bankman-Fried is now in custody, accused by the United States of buildingA house of cards on a basis of deception, while telling investors that it was one of the most secure buildings in crypto.”

Bankman-Fried told the BBC that he hoped he hadn’t killed cryptocurrencies.

The collapse of FTX, a company founded by Sam Bankman-Fried, has been the biggest blow to Bitcoin in its short history, experts told the BBC.

FTX has undoubtedly been a blow, but 2022 has repeatedly pounded cryptocurrencies.

“We’ve never seen anything like this in cryptocurrencies before”said Professor Carol Alexander of the University of Sussex’s Business School.

She predicted last year that cryptocurrencies would collapse by 2022, but admitted she was surprised by the sequence of events.

Blow after blow

The first major blow came in May with the sudden collapse of two popular digital currencies that led to the removal of US$400.000 Million of the value of Bitcoin and the crypto ecosystem.

Do Kwon, the founder of the two terra coins, is now wanted by South Korean authorities, who accuse him of hiding in Serbia.

Numerous other smaller scandals have shaken confidence in the cryptocurrency ecosystem, such as Kim Kardashian fined $1.26 million for promoting a currency in trouble.

The founder of the failed terrac cryptocurrencies, the South Korean Do Kwon, He is also being sought for trial.

There has also been the collapse of the previously booming non-fungible token market, with NFTs once making millions and now struggling to sell.

Massive hacks at crypto companies have also affected trust, and hackers US robbed$600 million from the Ronin network.

With the collapse of the value of bitcoin and other cryptocurrencies, large companies in the sector such as Celsius, Three Arrows Capital and BlockFi have filed for bankruptcy, leaving small and large investors penniless, and the police investigating what happened.

The price of one bitcoin, often seen as a barometer of how the entire ecosystem is doing, now hovers around $18,000, a 70% drop from its peak in November 2021.

U.S. authorities said Kim Kardashian received $250,000 for promoting a controversial cryptocurrency without stating she had been paid for it.

Will crypto reappear?

The fall of FTX and others leaves a big void in the industry and a lot of nervousness about other players.

Last Tuesday, December 13, more than $1.4 billion withdrawn from Binance, apparently as a result of negative headlines about cryptocurrencies.

The company’s CEO, Changpeng “CZ” Zhao, urged calm on Twitter and said it was “business as usual.”

But Andy Renshaw, senior vice president of product management at Feedzai, asserted that cryptocurrencies require a strong and diverse group of exchanges to survive this ongoing struggle.

Experts believe that cryptocurrencies will rise from the ground and recover the space they had until a few months ago.

“Without a credible and reliable place to trade safely, cryptocurrencies are unlikely to return to the title fighting state, no matter the title,” he explained.

Digital currencies are, of course, only a part of the crypto ecosystem, but Most forecasts about the increase in value in the short term are Pessimistic.

Professor Omid Malekan of Columbia Business School acknowledged that things look bleak for cryptocurrencies as a speculative asset.

“Prices have gone down and many of the biggest providers of investment-related services have exploded,” he said.

After recalling that cryptocurrencies remain, above all, a technology, the expert said that if you look only at that aspect the balance is positive. LIt’s going well, in some ways better than ever.”.

Malekan recalled that the adoption of bitcoin and so-called stablecoins in developing countries without a reliable financial infrastructure shows that Technology is improving lives.

Deleveaux also denied that the violent booms and busts of cryptocurrencies belie the overall progress of these instruments.

And he noted how charities are using crypto to get funds to places. where normal money can’t get there due to conflict or repression.

He also explained that the latest scandals are “An opportunity to purge scammers” of cryptocurrencies.

“Crypto is basically a very short word for the future of the digital global economy,” Professor Alexander noted, citing the use of crypto technology in building metaverse environments that some think will be the future of work and life.

Original source in Spanish

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