In a tweet on Nov. 12, the popular commentator argued that the week’s events were actually nothing new for Bitcoin.
FTX “a real black swan event”
Despite falling 25% in days, BTC/USD is not doomed as a result of the insolvencies impacting FTX, Alameda Research and possibly other major crypto companies.
For Stockmoney Lizards, the unravelling, while sudden, is not hugely different to liquidity crises from earlier in Bitcoin’s history.
“We have indeed seen a real black swan event, the FTX bankruptcy,” it said.
“The history of BTC is lined with such events and the market will recover from it as it did in the past.”
An accompanying chart flagged similar “black swan” moments from the past, stretching back to the Mt. Gox hack in 2014.
Two other notable events were the hack of exchange Bitfinex in 2016 and the March 2020 COVID-19 cross-market crash.
As Cointelegraph reported, ex-FTX executive Zane Tackett even offered to copy Bitfinex’s liquidity recovery plan from the time of its $70 million loss by creating a token. FTX subsequently filed for Chapter 11 bankruptcy in the United States.
Reactions have included frank appraisals of the crypto industry, with Filbfilb, co-founder of trading suite Decentrader, forecasting a multi-year recovery process.
Changpeng Zhao, CEO of Binance, which at one point planned to buy FTX, has warned that the industry has been “set back a few years.”
Exchange BT reserves near five-year low
Meanwhile, the loss of user confidence is already showing up in declining exchange balances.
According to data from on-chain analytics platform CryptoQuant, the BTC balance of major exchanges is now at its lowest since February 2018.
The platforms tracked by CryptoQuant finished Nov. 9 and 10 down 35,000 and 26,000 BTC, respectively. Both days were multi-month records, nonetheless not surpassing the single-day tally from Jun. 17 — 67,600 BTC.
Exchange outflows continue to be monitored by industry analysts, among them CryptoQuant contributor, Maartunn.
More broadly, voices have been calling on social media users to withdraw funds from custodial wallets.
“Bitcoin exchanges are run by people who learned fiat finance,” Saifedean Ammous, author of the popular book, “The Bitcoin Standard,” wrote in part of a Twitter post.
“Gambling with depositors’ money is normal & healthy for them, because in the fiat system the central bank destroys the currency to bail them out every time it goes wrong.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
For more news at Break’n News – click here
Break’n Pics – Click here for Free Stock Photos
GoCoin – Latest Cryptocurrency News and Trading