all other crypto exchange tokens have sunk

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On November 11, FTX, the third largest digital asset trading platform -exchange in English- in the cryptocurrency market, filed for bankruptcy and its CEO, Sam Bankman-Fried, resigned from his position as head of the company. The flood of withdrawal requests from investors, caused by mistrust in FTT, the FTX token, brought the company to a critical situation: even Binance, which was willing to bail it out, ruled out doing so after check the status of the accounts of the firm founded by Bankman-Fried.

The bankruptcy of FTX has generated uncertainty in the cryptocurrency market, which has also seen how other ‘tokens’ have lost part of their value.

Drop of other tokens. In the past week, Forbes published an article in which he pointed out the value that some tokens had lost in the last year: BNB from Binance, -54%; OKX’s OKB, -31%; UNI from Uniswap, -78%; CRO of Crypto.com and FTT of FTX, -97%. The North American magazine also indicated that tokens with inflated values, the origin of FTX’s bankruptcy, were still in circulation and suggested that this could be the downfall of the cryptocurrency market, which has seen how, in less than a year, the price of bitcoin has fallen by 77%, according to Bank of America data cited by fortune.

And while it is true that it is not the first time that this market has recovered after a blow, the current situation raises more uncertainty than in the past.

How the word blockchain got corrupted and contaminated forever

Changing economic landscape. The rise in interest rates affects the cryptocurrency market, which until now had benefited from cheap money, since it makes financing more expensive and causes many investors to give up depositing their money in high-risk assets -such as cryptocurrencies-, to place it in what is known as ‘safe haven assets’, for example, US debt. Additionally, in an inflationary context, people are much more cautious when spending their money on risky investments, as explained by Joaquín Robles, XTB analyst, to the vanguard. In addition, mining cryptocurrencies has become more expensive due to the increase in electricity rates caused by the energy crisis.

another bad news. On the other hand, as stated by Roberto Scholtes, Head of Strategy at Singular Bank, to the Chain Being, the bankruptcy of FTX constitutes the “third link in a sequential fall” that began with the collapse of the price of Bitcoin, which was followed by the resounding fall of Luna, the Terra token. Now, the collapse of the exchange founded by Bankman-Fried generates mistrust among investors, especially institutional ones.

regulation drums. Furthermore, the bankruptcy of FTX has reinforced the idea that the cryptocurrency market should be regulated in some way. This was stated last week Brad ShermanDemocratic congressman and head of the Investor Protection and Capital Markets subcommittee, who urged the SEC (US Exchange Security Commission) to act “to end the gray area in regulatory terms in which the crypto industry has operated”, adding that he will examine with the rest of the congressmen the option of preparing federal legislation.

Biden’s word. In fact, in a statement Posted in the White House last week, the US president thanked the FSB (Financial Stability Board) for the recommendations made in a report to regulate the cryptocurrency market. He further added that it was necessary to build public awareness of the risks involved in investing in such a volatile market.

essays. At the same time, the Federal Reserve Bank of New York, in collaboration with members of the banking sector, announced the first proof of concept (PoC) project for the digital dollar, which will last 12 weeks, to verify what could be the operation of a regulated digital currency platform involving, among other players, central banks. The future is digital, and it seems that traditional banking is acting accordingly.

Image: Behnam Norouzi / Image

On November 11, FTX, the third largest digital asset trading platform -exchange in English- in the cryptocurrency market, filed for…

On November 11, FTX, the third largest digital asset trading platform -exchange in English- in the cryptocurrency market, filed for…

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