How does the collapse of FTX strengthen cryptocurrency and contribute to its growth?

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From $47,000 to $17,000 in 11 months or 63% – that is what Bitcoin lost in 2022! 10% of which fell on two days – November 8-9, when the price of the first cryptocurrency dropped to the level of December 2020 – $ 16,000. The reason for such a serious decline was a local tragedy, namely, the collapse of the FTX cryptocurrency exchange and the complete disappointment of investors in the sphere of virtual coins.

In fact, until the recent events in the markets, there was no idea of a complete collapse of the cryptocurrency world. The situation looked quite logical, given the global crisis. But everything was undermined by the collapse of the FXT exchange and the actual ruin of its owner Sam Bankman-Fried (SBF), who in a couple of days turned from a billionaire with a fortune of $ 26 billion into a virtual outcast.

What does FTX have to do with it? It’s simple: blockchain researchers found that the exchange backed Alameda Research with $4 billion in FTT tokens at a difficult time. Therefore, if the hedge fund goes bankrupt, and this is quite possible, then the Bankman-Fried exchange will not return the loan back. The amount is incredible. It was to her that investors who wished to withdraw their money from the exchange reacted. Users withdrew $6 billion from FTX in 72 hours, according to Reuters, further driving down the value of FTT. As a result, since the beginning of the month, the coin has lost 80% of its price. This caused a general panic in the market.

The price of Bitcoin fell to $16,000, Solana lost half of its value, and the USDT stablecoin, which has been especially popular in recent months, hastened to prove that it has nothing to do with FTX and Alameda. Many exchanges did the same. The same Binance advocated transparency and published a list of wallets containing $69 billion.

Did it help Bitcoin and cryptocurrencies? In the short term – no, in the long term – this only strengthened the industry: panic selling stopped, investors began to buy BTC on the bottom, processes for revising the regulation of cryptocurrencies began (to protect clients), new figures like Elon Musk began to appear, seriously determined to change and influence crypto-currencies industry. It is especially worth highlighting the “weeding out” of weak investors, who choose short-term speculation instead of accumulation. And those who bought BTC at levels significantly higher than the current ones continue to buy. All this gives a “green light” to those large investors who previously did not risk entering the market.

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