FTX collapse: Good or bad for crypto in the long run?

[o48o]

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Right now, the industry is a lot more centralized than it was before fierce regulations from mainstream governments were introduced. And things are bound to get worse due to the recent collapse of a major crypto exchange. Who knows what would be of crypto 10-20 years in the future? Just my thoughts

The union of regulated banking system and decentralization is totally possible to create, just not in a sense early cryptopunks here experienced their pseudonymity and shadowbanking. Decentralization and confidential smart contracts would actually benefit a lot the current monetary system and make it more trustworthy. Problem is that it takes ton of time to create something that can handle so much wealth, and it should be bullet proof. It can't rely on third party machines like in TEE and has to have privacy build on layer 1.

[stomachgrowls]

In my opinion when FTX Collapse is a bad thing, although they have been proven to manipulate data and use consumer money for pleasure but this will make panic and make investors think that the FTX case will be repeated.

Exchange bankruptcy
Exchange used up their investors/users funds

Is never considered to be a good thing and of course its extremely bad.This do create extreme fud and lost of trust into the market which some people say its temporal but this would really be creating
that permanent damage in speaking about reputation of entire crypto space. New users or investors could impossibly be able to ignore these factors and incidents.
Any exchange hacks and other issues in relation with hacking and other things correlated is never been good and could give that impression
which would slow down up a bit if we do speak about recognition and adoption.

[romero121]

FTX Collapse will be remembered forever same as we have got MtGox in the past. Even if the market haven't crashed out of the exchange, we could've experienced the same market situation as now. This is how I've understood about the market, because unlike the incidents the market is predicted to turn bearish right now in connection to the price movement of the previous years.

[Abiky]

FTX Collapse will be remembered forever same as we have got MtGox in the past. Even if the market haven't crashed out of the exchange, we could've experienced the same market situation as now. This is how I've understood about the market, because unlike the incidents the market is predicted to turn bearish right now in connection to the price movement of the previous years.

You've got that right. The FTX collapse is no different than the Mt. Gox collapse, in the sense that it destroyed investors' credibility into crypto for a short period of time. When this happens, market prices fall all the way down the drain at a very fast pace. Most people eventually sell their crypto holdings due to fear, uncertainty, and doubt. But strong hands will buy more coins and "hodl" them no matter what. As with any undesired event in the crypto/Blockchain space, governments take action by tightening regulations in order to bring more legitimacy to the same.

I don't think this is the end of crypto, because the space is constantly being developed and maintained as we speak. There are a lot of companies showing interest into crypto/Blockchain tech, so it's likely the industry will emerge stronger in the future. If history repeats itself, we will see a resurgence in crypto market prices within the not-so-distant future. Who knows if taking advantage of the FTX collapse would lead you towards untold riches in the long run? Just my thoughts

[Silberman]

FTX Collapse will be remembered forever same as we have got MtGox in the past. Even if the market haven't crashed out of the exchange, we could've experienced the same market situation as now. This is how I've understood about the market, because unlike the incidents the market is predicted to turn bearish right now in connection to the price movement of the previous years.

I am not so sure the crash would have been this intense without the help of FTX, obviously we were already in a bear market before the FTX crashed, but at the time the price was showing some small signs of a recovery and when this news was published the reaction of the market was immediate and a fast crash soon followed, and it is possible this is not the end as we do not have a way to know how many other exchanges could crash as they had a high exposure to FTX.

[Kemarit]

FTX Collapse will be remembered forever same as we have got MtGox in the past. Even if the market haven't crashed out of the exchange, we could've experienced the same market situation as now. This is how I've understood about the market, because unlike the incidents the market is predicted to turn bearish right now in connection to the price movement of the previous years.

I am not so sure the crash would have been this intense without the help of FTX, obviously we were already in a bear market before the FTX crashed, but at the time the price was showing some small signs of a recovery and when this news was published the reaction of the market was immediate and a fast crash soon followed, and it is possible this is not the end as we do not have a way to know how many other exchanges could crash as they had a high exposure to FTX.

I have a feeling that there are more exchanges that could collapse or have died already because of this bear market. And it just so happen that it has been magnified several times with the FTX fiasco last month. So a bit of revival to us, from $22,000 of bitcoin and so is the Ethereum market when suddenly this happen.

It's was really very quick that others reacted very fast as well and started to sell their BTC or ETH because they are afraid that they are going to lose their money.

I think it's good that it was weed out those weak hands and what remains truly believed on what crypto is for the future.

[raidarksword]

Bad because it worsen the market sentiments and we almost had a small market recovery but the unprecedented collapse of FTX was huge loss after to LUNA collapse. Good because it weed out the bad actors like SBF and only legit people in the crypto industry will remain that will have a better future of the industry.

[Sang Prabu]

I think more adverse effects, we can see that the volume of transactions decreases, most people will immediately move assets to private wallets so as to make the market difficult to rise, I am worried that if FTX occurs in other large exchanges it will make the market drop deeper.

[Silberman]

FTX Collapse will be remembered forever same as we have got MtGox in the past. Even if the market haven't crashed out of the exchange, we could've experienced the same market situation as now. This is how I've understood about the market, because unlike the incidents the market is predicted to turn bearish right now in connection to the price movement of the previous years.

I am not so sure the crash would have been this intense without the help of FTX, obviously we were already in a bear market before the FTX crashed, but at the time the price was showing some small signs of a recovery and when this news was published the reaction of the market was immediate and a fast crash soon followed, and it is possible this is not the end as we do not have a way to know how many other exchanges could crash as they had a high exposure to FTX.

I have a feeling that there are more exchanges that could collapse or have died already because of this bear market. And it just so happen that it has been magnified several times with the FTX fiasco last month. So a bit of revival to us, from $22,000 of bitcoin and so is the Ethereum market when suddenly this happen.

It's was really very quick that others reacted very fast as well and started to sell their BTC or ETH because they are afraid that they are going to lose their money.

I think it's good that it was weed out those weak hands and what remains truly believed on what crypto is for the future.

It is unfortunate the weak hands have to suffer this much and lose their money but that is just the way the markets work, the money flows from the impatient investors to the patient ones, and this is never going to change regardless of the asset we are talking about, and while I would like for the market to remain stable and to not have any other crash until the next bull run comes, the truth is that there is so much time remaining until that happens that it would be weird for bitcoin to remain static for such a long amount of time.

[Oasisman]

Bad because it worsen the market sentiments and we almost had a small market recovery but the unprecedented collapse of FTX was huge loss after to LUNA collapse. Good because it weed out the bad actors like SBF and only legit people in the crypto industry will remain that will have a better future of the industry.

Not only that it creates bad market sentiments, but a lot of people have lost their assets and that could've been converted into BTC or the profits could've been bought BTC, that'll help hold BTC at around the region of $20k. Some other investors are now afraid to use any exchange after the incident.
On the other hand, the incident may have caused another bad exchanges reduced it's number, but there are still a lot of projects that could turn out to be a scam on the latter, so we are not really so sure about "only the legit ones will remain".

[abel1337]

Bad because it worsen the market sentiments and we almost had a small market recovery but the unprecedented collapse of FTX was huge loss after to LUNA collapse. Good because it weed out the bad actors like SBF and only legit people in the crypto industry will remain that will have a better future of the industry.

Not only that it creates bad market sentiments, but a lot of people have lost their assets and that could've been converted into BTC or the profits could've been bought BTC, that'll help hold BTC at around the region of $20k. Some other investors are now afraid to use any exchange after the incident.
On the other hand, the incident may have caused another bad exchanges reduced it's number, but there are still a lot of projects that could turn out to be a scam on the latter, so we are not really so sure about "only the legit ones will remain".

Yep there are negative and positive things that happened into crypto because of the collapse but what remains in peoples mind are the negative since crypto take a major hit because of FTX collapse. I just heard earlier that FTX founder SBF were arrested in Bahamas earlier because US files a charges against him. It's predictable given that there are many US citizen who were victimize by him and still hoping to get their money back. Regulators are showing control with the FTX mayhem and in the future a situation like this may happen again so I expect that regulators are deploying or showing their power now to be able to control the situation right away.

[zasad@]

https://www.sec.gov/news/press-release/2022-219

SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX
Defendant concealed his diversion of FTX customers’ funds to crypto trading firm Alameda Research while raising more than $1.8 billion from investors
"According to the SEC’s complaint, since at least May 2019, FTX, based in The Bahamas, raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.-based investors. In his representations to investors, Bankman-Fried promoted FTX as a safe, responsible crypto asset trading platform, specifically touting FTX’s sophisticated, automated risk measures to protect customer assets.."

[Abiky]

It is unfortunate the weak hands have to suffer this much and lose their money but that is just the way the markets work, the money flows from the impatient investors to the patient ones, and this is never going to change regardless of the asset we are talking about, and while I would like for the market to remain stable and to not have any other crash until the next bull run comes, the truth is that there is so much time remaining until that happens that it would be weird for bitcoin to remain static for such a long amount of time.

You've said it yourself. There's a long road ahead before Bitcoin becomes "stable" enough for mainstream use. The crypto market is still relatively small compared to the stock market. I'd say these "hiccups" will ultimately become history as crypto becomes a "force to reckon with" in the future. The Mt. Gox collapse, and now the FTX collapse will make the crypto industry much more legitimate to the eyes of investors and traders within the long term.

This is only the beginning of a long journey ahead for crypto/Blockchain tech. Of course, we should expect stricter regulations after the aforementioned events. This means greater KYC requirements, and more restrictions to both the end users and crypto companies. But at least, this is better than crypto becoming "illegal" for mainstream use. The future is widely unpredictable, so we can only hope for the best. Just my thoughts

[Victorik]

The collapse of a major crypto exchange, has once again taken the world by storm. There is a lot of FUD being spread by mainstream media, making people believe this is the final chapter for crypto/Blockchain tech. Now, US lawmakers are pushing towards stricter regulations with the excuse of helping protect investors' interests. Other countries could follow the US, greatly stifling the growth of the industry. I'm beginning to wonder whenever the collapse of FTX would be good or bad for crypto in the long run? This looks like another Mt. Gox situation, so it's likely things will be better in the long run after the dust settles. But I'm not so sure, especially when governments are now seeing crypto as a threat to the existence of Fiat (something they didn't think about when crypto was in its early years).

What are your thoughts? Your input will be greatly appreciated. Thank you very much.

What Happened with FTX was quite unfortunate and I sympathize with the victim, it's really not a funny thing when you lose money.
But what we must understand is that FTX was a disaster waiting to happen. It was always gonna fail and it was just a matter of time.
Moreso, this is not the first time an exchange is shutting down, and it will not be the last time either. More will follow and until the system is completely sanitized, more exchange will go for good.

[d3nz]

Bad because it worsen the market sentiments and we almost had a small market recovery but the unprecedented collapse of FTX was huge loss after to LUNA collapse. Good because it weed out the bad actors like SBF and only legit people in the crypto industry will remain that will have a better future of the industry.

Not only that it creates bad market sentiments, but a lot of people have lost their assets and that could've been converted into BTC or the profits could've been bought BTC, that'll help hold BTC at around the region of $20k. Some other investors are now afraid to use any exchange after the incident.
On the other hand, the incident may have caused another bad exchanges reduced it's number, but there are still a lot of projects that could turn out to be a scam on the latter, so we are not really so sure about "only the legit ones will remain".

As of now, this is a major problem in the cryptocurrency world. Most people are holding their assets on the exchange since it's convenient and can trade quickly in case of a sudden market change but this might cause a problem in the future. And, that is why we really need to secure our hard-earned money by holding it in a hardware wallet.

[asriloni]

this case actually have such massive effect in the long run, even for short term it's already showing that's like the crisis of trust that many customers have against their exchange that seems make them more hesitant in putting their investments in these platform. moreover many coins like USDT and BUSD actually being doubted its credibility in which in this case many of us always think that these coins that's supposed to be a coin that could save our investments from fluctuation might be crashing itself, always wish that this case could be resolved with win win solution but surely that's just not gonna be happening it seems.

[AmoreJaz]

this case actually have such massive effect in the long run, even for short term it's already showing that's like the crisis of trust that many customers have against their exchange that seems make them more hesitant in putting their investments in these platform. moreover many coins like USDT and BUSD actually being doubted its credibility in which in this case many of us always think that these coins that's supposed to be a coin that could save our investments from fluctuation might be crashing itself, always wish that this case could be resolved with win win solution but surely that's just not gonna be happening it seems.

there are good and bad side of this situation. good - because people will be more cautious dealing with exchanges or centralised ones. bad because it gives another reason for noncrypto users to think that crypto market is rigged or fraudulent market. but either way, every user should educate himself with this scenario to understand better why such failure is happening all the time. it is not the technology that is rigged but the people who is handling or managing it have ill intentions. they may not have such intention at the beginning, but as they accumulate wealth, they change their route owed to greed and other selfish desires.

[cryptops.exchange]

I think the collapse of FTX will be over all good thing for crypto in the long run for a couple reasons. One reason is that this will encourage users to look for decentralized self custody alternatives for trading crypto currency derivatives. The second reason being that crypto investors and VC's will hopefully now take the time to research and apply due diligence when looking for projects to invest in. With far fewer pump and dump, rug pull ponzi types and overall better quality innovative projects in crypto it will attract more investors because they will view the market as being more credible and serious.

Some minimal industry guidelines could be developed and accepted to differentiate the projects seeking funding.

These guidelines could include:

• Is the project able to display basic functionality running on a testnet?
• How long has the project been in development while running on the testnet?
• Does the project have a main public blockchain up and running?
• Can the project explain exactly how it is going to earn a return for its hodlers instead of simply waiting and hoping that greater fools come along?
• Will the project provide any kind of unique disruptive innovation to the space it is entering or is it simply a similar slightly different copy of other established solutions?

[Miaallen]

The fall of cryptocurrency exchange of such magnitude is not good for cryptocurrency world as it generates and spreads FUD about crypto. This will bring a setback to acceptability cryptocurrency is currently enjoying. And the new individuals who are yet to be in crypto might lose interest in it.

[fzkto]

The fall of cryptocurrency exchange of such magnitude is not good for cryptocurrency world as it generates and spreads FUD about crypto. This will bring a setback to acceptability cryptocurrency is currently enjoying. And the new individuals who are yet to be in crypto might lose interest in it.

I think you are wrong, because scam exchanges are unlikely to affect the credibility of cryptocurrencies. Creating different pyramid schemes cannot affect the trust in the money in your bank account, it is the same with crypto. FTX scam has certainly impacted the price and will probably do so again if any new details come to light, but it won't affect the credibility of crypto in any way.