Crypto market shows signs of revival after FTX collapse

Crypto market shows signs of revival after FTX collapse


726 Listen to this article The cryptocurrency market, which faced a tumultuous year in 2022 marked by the collapse of […]

Latest News

Listen to this article

The cryptocurrency market, which faced a tumultuous year in 2022 marked by the collapse of crypto exchange FTX and other major industry players, is now displaying signs of a remarkable resurgence. This turbulent period had led to plummeting cryptocurrency prices, significant damage to the industry’s reputation, and a wave of regulatory crackdowns.

FTX CEO Sam Bankman-Fried Found Guilty

In a significant legal development, a New York jury recently found Sam Bankman-Fried (SBF), the former CEO of FTX, guilty of defrauding FTX’s customers prior to the abrupt collapse of the exchange in November 2022. This verdict comes in contrast to SBF’s initial plea of not guilty. He maintained that while he had mismanaged the company, he had not engaged in fraudulent activities.

Bitcoin’s Rollercoaster Ride

FTX’s downfall was one of the pivotal incidents that sent the price of Bitcoin (BTCUSD) crashing to its lowest point since 2020. In the wake of the collapse of FTX and other industry meltdowns, Bitcoin and other major cryptocurrencies witnessed a substantial decline in their value.

Bitcoin’s Resurgence in 2023

However, the cryptocurrency market has shown remarkable resilience in 2023. Bitcoin, the flagship cryptocurrency and a key barometer of market sentiment, has more than doubled in value this year. This performance marks 2023 as the best year for Bitcoin since 2020, in terms of percentage gains.

Read Also:  UBS Facilitates Entry into Crypto Market for Wealthy Clients via Hong Kong Platform

In late 2021, Bitcoin achieved a historic high, reaching $69,000 in November of that year. But as central banks began to hike interest rates in early 2022, riskier assets like cryptocurrencies began to feel the pressure, and Bitcoin lost more than 65% of its value during that year, falling below $16,000 in November 2022.

Spot Bitcoin ETFs Offer Hope

Analysts attribute this resurgence to growing excitement surrounding the possible approval of spot Bitcoin exchange-traded funds (ETFs) by U.S. regulators. Several major financial institutions, including BlackRock, have filed applications with the U.S. Securities and Exchange Commission to launch Bitcoin ETFs. If approved, these ETFs could potentially attract billions of dollars in institutional investments, keeping traders optimistic.

Central Banks’ Rate-Hiking Cycles

The resurgence in cryptocurrencies is further fueled by the expected conclusion of central bank rate-hiking cycles. With the U.S. Federal Reserve and the Bank of England both maintaining their interest rates, it signals a possible plateau for rate hikes, drawing cash back into high-risk assets like cryptocurrencies.

Market Cap Rebound

The overall value of the cryptocurrency market reached its peak at $3 trillion in November 2021. However, it faced a significant decline throughout 2022, hitting a two-year low of $796 billion as FTX imploded. Since then, the market has managed to recover, with its value hovering above $1 trillion for most of this year. As of Thursday, the global cryptocurrency market’s value stood at $1.35 trillion, thanks in part to the October surge in Bitcoin’s price.

Stabilizing Bitcoin?

Bitcoin, known for its price volatility, exhibited some level of stability in the aftermath of the FTX collapse. However, this relative calm did not necessarily benefit market participants. Many investors are drawn to cryptocurrencies because of their inherent volatility, which provides opportunities for quick profits. Notably, since mid-October, Bitcoin’s price swings have expanded again, reflecting renewed market activity. Market players appear to remain unfazed by the unconfirmed speculation of a spot Bitcoin ETF approval.

Read Also:  Analyst Benjamin Cowen Predicts Potential 50% Bitcoin Crash Ahead of 2024 Halving

VC Funding Slowdown

In 2021, venture capital (VC) investors poured substantial investments into emerging crypto firms. However, in 2022 and 2023, the flow of VC funds into the crypto space began to taper. U.S. VC investments in the crypto sector in the third quarter of 2022 amounted to just $704 million, a stark decline from the staggering $6.12 billion in the first quarter of 2022. This slowdown was not solely due to FTX’s failure but was already in progress, partly influenced by the collapse of the terraUSD ecosystem. Venture investors are now proceeding with caution in their approach to crypto investments.

For the Latest Crypto News follow the Coinography and Subscribe our YouTube channel or follow us on social media platforms like Twitter, Facebook, Instagram and LinkedIn.

Top Recommended Articles

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments

Get Latest Updates

Latest News

Web Stories

Latest News

Would love your thoughts, please comment.x
Scroll to Top
Bitcoin ETFs Surge as Investors Seek Exposure Coinbase, Andreessen Horowitz, and Ripple have joined forces to fund a new crypto DMM Bitcoin Hit by $305M Hack Ripple Releases 1 Billion XRP Tokens What to Expect from Bitcoin’s Price Rally in H2 2024 Trump’s MAGA Coin Soars 7% While Biden Parody Sinks Amid Ex-President’s Trial — NFTs Hold Steady Analyst Warns About Dogecoin Decline CME Denies Solana Futures Plans Amid Growing Rumors Can PEPE flip Polygon? Market cap race heats up! Why Bitcoin Price Is Down Today? Cristiano Ronaldo Launches 4th NFT Collection on Binance Amid $1B Lawsuit Coinbase Alleges SEC Dodging Howey Test in New Appeal Ethereum ETFs Granted Official Approval by SEC Crypto Whale Splurges $10.4 Million on Meme Coin PEPE SOL Price Nearing Support as On-Chain Activity Dips for Solana Penguiana Meme Coin’s Presale Achieves Success, Raising 290 SOL Solana to Bitcoin Bridge, Zeus Network, Set for Debut in Q3 2024 DeFi Lending Leader Aave Unveils V4 Protocol Overhaul MicroStrategy (MSTR) Incurs Losses in Q1 After Digital Asset Impairment Takes Toll Upbit Emerges as Top Five Crypto Exchange, Posing Challenge to Binance, Coinbase