The collapse of FTX has undermined investor confidence and could extend the crypto winter until the end of 2023. This point of view is shared by Coinbase analysts.
All this means that remediation will take time and the winter may take a few more months to work through the system. END/
Read the full report here 👇 https://t.co/1rt9tkluNh
— Coinbase Institutional (@CoinbaseInsto) November 15, 2022
The events around FTX turned into a deleveraging of short positions and the departure of large buyers, which increased the vulnerability of the cryptocurrency market. “Second order effects” that will affect clients and counterparties of the bitcoin exchange and related Alameda Research are not ruled out.
In addition to the processes associated with the bankruptcy of FTX, investors will continue to monitor the dynamics of interest rates, Coinbase indicated.
With their optimistic development, the market will recover from the shock in a few months. Analysts doubted the improvement of the macroeconomic background in January after the current weakening of the dollar amid encouraging inflation data.
Poor liquidity will continue until the end of the year. Stablecoin dominance rose to 18% of total market capitalization, which collapsed from $1 trillion to $800 billion from the start of the month before the FTX crash.
“Combination of magnification hashrate (resulting in increased complexity), rising energy costs and lower prices have led to an increasingly tight economic environment for bitcoin miners.” the report says.
As a reminder, crypto lending platform BlockFi will file for bankruptcy after the start of the FTX restructuring, according to the WSJ.
Earlier, CEO of Binance Changpeng Zhao compared the current situation in the industry with the financial crisis of 2008. In his opinion, in the coming weeks, even more companies may fail.
Do Zhao, Circle co-founder and CEO Jeremy Allaire compared FTX’s troubles to the collapse of Lehman Brothers, an investment bank that catalyzed the 2008 crisis.
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