Crypto's performance is worse than even banking/housing stocks in 2008. No end in sight to the selling. People are blaming FTX, when it more likely crypto was going to keep falling anyway as the fad/bubble bursts. FTX is just more salt on the wound. BTC was already down 70% YOY when FTX failed. S&P 500 and Nasdaq up huge this week. I dunno why anyone would waste their time with crypto anyway when far superior investments exist.
It's hard at this point for me to not blame crypto-the-technology and crypto-the-culture for the repeated and spectacular failures of crypto-the-industry. It's not like FTX was an isolated incident. It's becoming sort of a scapegoat for crypto enthusiasts because it was such a big deal, but practically everything that has come out of the crypto space since Bitcoin and Ethereum has been a grift to some degree or another.
Something about crypto quickly and irreparably drew the get-rich-quick crowd, and I don't think there's any coming back from that. Where that kind of person gathers, scams abound.
FTX did not crash the crypto market. The crypto market crashed FTX. Crypto running on greater fool theory ran out of fools. FTX was just caught swimming naked after the tide went down.
FTX failing is not crypto failing. FTX failing just proves the fundament of crypto to be right - don't use centralized finance (yes, FTX is centralized finance).
OK, now you're moving from the realm of genuine curiosity and into the realm of victim blaming.
Before the collapse, FTX and crypto had a veneer of respectability. They had ads everywhere and the mainstream press treated them like legitimate financial investments.
The failure here isn't of the individuals who get suckered with crypto bullshit, it's a failure in our ability to regulate and tamp down that kind of crap. Shame on the press, government institutions, and of course tech sector VCs, for either shilling for, investing in, or looking the other way while these frauds were taking people to the cleaners.
Crypto very much follows the stock market. Interest rates are inversely correlated to stock market performance. After 2008 the stock market went into the longest bull run in history which has now reversed this year. Stock market is down and crypto is collapsing because it is the wild west. There are for sure going to be multiple exchange collapses not just FTX.
You are absolutely right, but this highlights that what you are seeing these days with the failure of FTX and its associated fall-out is not a failure of cryptocurrencies or blockchain or any statement of its merits or demerits. It's a failure of traditional finance in an unregulated industry. This highlights how traditional finance is incredibly brittle and requires very strict regulation to have any semblance of resilience, when not failing anyway à la 2008.
It's still a scam even if bitcoin is currently benefiting from the creation of institutional ETFs. FTX was one of the largest financial frauds in history and the founder was disgraced and convicted. There's clearly a large amount of appetite for regulatory action in government right now and afaik the funding in the space has completely dried up. What did we get for all that trouble? A really inefficiet payments system? "Digital Gold"? A fun way to fund terrorists and drug running? Crypto proponents are delusional if they think they can just shake off the reputational damage they brought onto themselves in the past several years.
The mainstream response to this debacle is a bit incomprehensible.
FTX was the antithesis of cryptocurrency; it was a centralised exchange, that was also trying to become a bank, and was AFAICT trying to kill DeFi [0].
The failure/success of FTX has no relation to the soundness of cryptocurrency.
I do however hope that this crash means fewer people will speculate on the prices such that it can finally stabilise a bit (and be useful without using stablecoins).
It seems like a fundamental flaw in their business model rather than a market downturn.
This seems like a bigger deal to me because FTX is part of then new wave of crypto companies that were supposed to be legitimising crypto. And even they can't stay afloat. It's just a matter of time before the next crypto giant falls.
FTX is just one input. Seeing that Crypto.com has 20% of their reserves stored in a pointless sh-tcoin (SHIB) is just further proof that people running cryptocurrency exchanges are idiots or greedy fools.
One or another variation of this story has played out many times already. Then the whole sand castle crumbles, and a lot of fake money gets wiped away.
The entire cryptocurrency space is just an unregulated gambling arena. There may be some solid, well-intentioned efforts within it, but they are completely overshadowed (and overcapitalized) by the purely insane gambling ones.
FTX is also going to feel a lot of pain when the crypto market crash completes. None of these companies are IMO sustainable without mass interest in cryptocurrencies, which is rapidly fading as people realise they're not going to get rich quick.
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