The implosion of FTX has not only affected investors who kept their funds on the exchange, but also the wider crypto investing circles. Genesis, described in the past as the “Goldman Sachs of crypto”, is feeling the heat and has suspended withdrawals. However, those tracking on-chain flow of cryptocurrencies point out to positive signals based on a large number of hodlers continuing to stay invested in a bearish market.
A tweet by the CEO of a rival exchange of FTX set off alarm bells, that eventually led to a bank-run and then the filing of bankruptcy by FTX. A report from Bloomberg states that recently, the U.K.’s Parliamentary Treasury Committee has tried to figure out the circumstances in which the Binance CEO had sent out the tweet announcing plans to sell off their holdings of the FTT token and whether they knew its consequences.
The fallout appears to have dampened sentiments for sure. A report describes Miami nightclubs not clocking in its usual footfall of crypto-rich clients.
The data from on-chain analytics, according to a report citing an on-chain analyst Will Clemente, points to retail investors taking custody of their bitcoins and crypto back, rather than the hot exchange wallets. There are more people now holding between 0.1-1BTC. The bearish market has also spurred crypto investors to buy more and wait for an uptrend.
Trying to up the momentum and sentiments, there are media supported views projecting 2023 as the year of Web3.
The impact on Genesis Global Capital (Barry Silbert, Digital Currency Group) has been hard. It is considered the first OTC platform selling bitcoin in 2013. A media report states that Genesis lost $175 million on FTX, though it eventually received support by its parent firm. Another firm to be hit hard is crypto lender Blockfi.
The emergence of Binance in the post-FTX crypto world that it has helped create, translates into a few positives – it has earmarked a billion-dollar recovery fund for any required rescue efforts in the next six months. A media report states that it has received 150 requests for financial help from affected crypto companies. There are many investment firms who have committed an initial corpus of money toward this effort.
Sources:
https://www.ft.com/content/68ca53f4-50e1-4607-8b05-a8801d8b1cb5
https://www.wired.com/story/ftx-collapse-genesis-crypto/
https://cointelegraph.com/news/how-bad-is-the-current-state-of-crypto-on-chain-analyst-explains
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