Could This Bankruptcy Forever Alter The Crypto Market?
The announcement turned the digital currency market on its head.
Photo Illustration by Michael M. Santiago/Getty Images
News that is entertaining to read
Subscribe for free to get more stories like this directly to your inboxEven outspoken evangelists of the digital currency market knew that there was always the possibility of serious volatility and potentially huge losses — but few experts foresaw the massive decline of one of the industry’s most influential firms.
Far-reaching ramifications
FTX cryptocurrency exchange filed for bankruptcy this week and its high-profile CEO, Sam Bankman-Fried, announced his resignation on Friday. While the outcome for the company looks bleak, it remains to be seen how far the ripples from its failure will extend.
If one crypto exchange can go under as quickly as FTX, the obvious fear among major players in this industry is that others can follow suit. Matt Weller, the global head of research for Forex.com, recently weighed in on the possible impact that the news could have on the value of digital currencies and the underlying infrastructure.
Five stages of grief
Weller compared the aftermath of FTX’s bankruptcy to the five stages of grief, suggesting that troubling signs earlier in the week represented denial. After Friday’s news, he said that investors had entered the second stage: anger.
“This stage is likely to last for a while,” Weller said.
From there, he said traders will move into the bargaining stage, which will probably include plenty of fretting over decisions to invest blindly in FTX.
The longest stage, Weller said will probably be depression. Although this could last more than a year, he expressed optimism that the market would eventually re-emerge in the acceptance phase. Nevertheless, he advised that it will be “a long road” and there has been “quite a bit of damage done this week.”
News of the bankruptcy led to losses for Bitcoin and other cryptocurrencies. Since the reports surfaced just before Wall Street’s opening bell, there was also a negative impact on the broader stock market.
Why Is The Aging Voyager 1 Probe Sending Back Incoherent Communications?
It's been speaking gibberish for a few months and officials are concerned.
One Woman’s Massive Donation Is Wiping Out Tuition At This Medical School
Her inheritance came with the instruction to do "whatever you think is right."
Woman’s Pets Will Inherit Her Multimillion-Dollar Fortune, Not Her Kids
It's not the first time four-legged heirs were named in a will.