The Crypto World Advances – 1 Year Since FTX’s Downfall

Posted on 16/11/2023 | 854 Views

Today, we reflect on the tumultuous events that unfolded a year ago with the collapse of FTX. This significant chapter in crypto history was marked by a frantic bank run, the suspension of customer withdrawals, unsuccessful acquisition talks with rival Binance, and an alleged hack of exchange wallets, leading to losses potentially as high as $500 million. The saga culminated in a Chapter 11 bankruptcy filing and the revelation of dubious dealings between Alameda Research and FTX. Despite these challenges, the market has demonstrated remarkable resilience, moving forward with a positive momentum that underscores the enduring strength and adaptability of the cryptocurrency landscape.

The spectacle surrounding Sam Bankman-Fried's misconduct and sensational personal life once dominated media headlines. But well before his fraud trial concluded with a guilty verdict, the crypto community had largely shifted focus and persevered.

FTX's collapse, fuelled by Bankman-Fried's actions, intensified the existing downturn in the crypto market, sparked initially by Terra's fall. This period saw Bitcoin prices barely maintain above US$15,000, and Solana, closely associated with SBF, drop below US$10. Investment flows slowed, the U.S. SEC tightened its grip, and global regulations tightened. Despite these challenges, the crypto world displayed remarkable resilience. Devotees continued to hold onto their assets, developers pressed on with innovation, and global usage of digital assets persisted.

A year on, the landscape has shifted significantly. Bitcoin's value has rebounded to over US$37,500, reasserting its status as a hedge against traditional finance issues, particularly following the banking crises in March. Ethereum's transition to proof of stake with the Shapella upgrade has been successful, and staking has become increasingly popular. The summer saw an influx of applications for spot BTC ETFs from traditional financial giants, while interest in tokenising traditional finance assets grew steadily.

Solana has regained strength, now trading above AU$100, buoyed by institutional investments and partnerships with companies like Visa and Shopify. Tron's adoption in emerging markets and its efficient USDT transactions have gained traction. Moreover, financial giants like Swift, BNY Mellon, and Circle (backed by Goldman Sachs, BlackRock, and Fidelity) are making significant strides in integrating blockchain and preparing for future milestones like Circle's anticipated IPO in 2024.

While the FTX scandal was undoubtedly a setback, it failed to cripple the industry. Efforts to rebuild trust are ongoing, and the industry is showing signs of recovery and maturation. It's evolving into a more regulated space, aligned with Web3 ideals, and increasingly intertwined with traditional finance.

Despite his infamous legacy, Sam Bankman-Fried won't be the downfall of crypto. The industry has moved past its turbulent phase, weeding out problematic elements, as indicated by the minimal market reaction to SBF's trial. The crypto world continues its journey, stronger and more resilient.

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