As the calendar flips to 2023, cryptocurrency is in the throes of a deep and dark winter. The value of nearly every digital asset, including bitcoin and ethereum, has plunged greatly as investors pull their funds from the fraught markets. This past year’s decline was marked by several headwinds, many of which have not yet abated.
In downturns, investors typically flee risky investments in favor of safer and more stable stores of value. Bitcoin and other cryptocurrencies are still a new asset class, and those who have invested in the coins have been selling off their holdings for fear they will crash, resulting in a chain reaction effect.
“FTX going down is not good for anyone in the industry. Do not view it as a ‘win for us.’ User confidence is severely shaken. Regulators will scrutinize exchanges even more. Licenses around the globe will be harder to get,” the CEO of the exchange Binance said in a memo released at the outset of FTX’s collapse.
It is a ponzi scheme.