Analytics
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The collapse of the FTX cryptocurrency exchange in November 2022 finally plunged the entire industry into a global crisis. This event triggered a massive wave of bankruptcies (Genesis, BlockFi, DCG and others), and investors lost billions of dollars.
Due to the collapse of FTX, more and more specialized sites are facing liquidity problems. For example, there have been a lot of questions to Binance recently regarding its financial reserves. At that time, there were even rumors that the company could become insolvent in the near future. Against this background, investors withdrew $6 billion from the site in a couple of days.
The bankruptcy of FTX has damaged investor confidence in the digital asset industry. In this regard, users massively withdrew their cryptocurrencies to cold storage. Now a logical question arises: what can we expect from the industry in 2023?
According to experts, a full recovery of the segment will take a lot of time, and the consequences of the crypto winter may be felt until the end of this year. The contagion from the collapse of FTX was extremely significant, and it is believed that the wave of massive bankruptcies will sweep the industry more than once.
The market could face a second-tier effect from counterparties that may have provided loans to FTX and related company Alameda Research. This, in turn, will provoke a deep liquidity crisis, and many specialized organizations will not survive this. This is especially true for counterparties with small operating volumes.
The announced developments will certainly force regulators to act more actively. The industry is inevitably moving towards global oversight to protect investor rights and minimize systemic risks. The governments of the US, EU and UK are increasingly trying to clean up the market to prevent resonant failures like FTX.
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