In the case of the FTX crash, the impact on the market was enormous. The fall not only affected FTX, but also the cryptocurrencies in which FTX invested heavily (such as Solana) and the companies that FTX did business with. The cryptocurrency exchange BlockFi, which received a line of credit from FTX (U.S. And that the company was going to be acquired by the company at the end of the year, it froze withdrawals before filing for bankruptcy a few weeks after FTX did so.
BlockFi, another major cryptocurrency exchange and lender, went bankrupt earlier this week as the FTX infection spread. Law enforcement would first have to organize an extradition with Bahamian authorities or negotiate a voluntary surrender with the legal team of the disgraced cryptocurrency prodigy. In November, Bitcoin (BTC) fell to new two-year lows, while the rest of the market experienced strong selling pressure following the collapse of the FTX cryptocurrency exchange. With a relatively new asset class such as cryptocurrencies, any new regulation has the potential to affect value.
Because the cryptocurrency market has a relatively low barrier to entry, even people who have never been interested in trading before can easily become cryptocurrency investors. It is still going strong and, despite all the online failure by several stock market experts, the cryptocurrency market “bubble” has not yet burst. That's why certified financial planners suggest allocating only 1 to 5% of your portfolio to cryptocurrencies to protect your money from volatility. Looking ahead to December, investors will be watching to see if the FTX crash will claim more victims in the crypto ecosystem.
Bank of America analyst Alkesh Shah says investors should separate FTX, BlockFi and other crypto companies that collapsed. When cryptocurrencies collapse, someone who has been intrigued from the sidelines might think that this is the time to go in and buy cheaply. The sale exposed for the first time excessive leverage in the cryptocurrency lending market, leading to the bankruptcies of Voyager Digital and Celsius and the fall of the Singapore-based crypto hedge fund Three Arrows Capital, following the collapse of the algorithmic stable currency TerraUSD in May. The biggest victim of the FTX crash so far has been the cryptocurrency company BlockFi, which filed for bankruptcy in November.
The FTX bankruptcy filing included the stock exchange and 130 companies affiliated with FTX, including Bankman-Fried's cryptocurrency trading firm, Alameda Research. Fears that the bankruptcy of the FTX would spread contagion in the cryptocurrency market were reaffirmed in late November, when cryptocurrency lender BlockFi filed for bankruptcy. The only thing guaranteed when it comes to investing in cryptocurrency is volatility, so investors should expect more in the coming years. However, BTC continues to respond to big news about cryptocurrencies, especially those that concern the industry as a whole or other major currencies such as Ethereum or Shiba Inu.