Report: FTX Crisis Could Extend Cryptocurrency Winter

گزارش: بحران FTX می‌تواند زمستان ارزهای دیجیتال را طولانی‌تر کند

A new report suggests that the FTX crisis has destroyed investor confidence and created another liquidity crisis in the cryptocurrency market. This report believes that as a result of these events, the digital currency winter could last longer than current predictions.

To Report Cointelegraph, Coinbase’s new research has analyzed the consequences of the FTX crash in the digital currency ecosystem. The collapse of the world’s third-largest cryptocurrency exchange has created a liquidity crunch that could prolong the cryptocurrency winter, the research report suggests.

After FTX declared bankruptcy on November 11, many institutional investors’ funds were stuck in this platform. The fall of FTX has also discouraged large investors and buyers from the cryptocurrency ecosystem. Coinbase emphasized that the domain of stablecoins has reached its highest level of 18%. This indicates that the liquidity crisis may continue at least until the end of the year.

Report: FTX Crisis Could Extend Cryptocurrency Winter
Dominance chart of stablecoins

Stablecoin Dominance measures the relative dominance of stablecoins in the cryptocurrency ecosystem compared to the total market capitalization. The increasing dominance of stablecoins indicates that market participants are selling their digital currencies and investing in dollar-backed stablecoins.

This report predicts that although after the announcement of FTX bankruptcy, the possibility of this crisis affecting other digital currencies is limited; But the market may see side effects from projects that have lent to or interacted with FTX or Alameda.

Read more: Collapse of Solana value at the same time as the collapse of FTX; Is the game over yet?

The unfortunate events surrounding the FTX crash have undoubtedly damaged the confidence of digital asset investors. Conditions will take time to improve, and this could very likely extend the digital currency winter for several more months; In our opinion, it may continue until the end of 2023.

The FTX crisis has hit the cryptocurrency market hard, especially at a time when consumer inflation data released fell short of expectations, causing a significant jump in traditional financial markets. Many believe that if this self-inflicted crisis was not ongoing, the digital currency market could also witness a similar growth.


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