The recent collapse of FTX has led to a plethora of “crypto is dead” headlines in the mainstream media. To someone that is new to crypto, these headlines might seem appropriate. However, if you’ve been around the industry for more than a few years, like us at Ledn, these headlines should come as no surprise.
Mainstream journalists are always waiting on opportunities to dunk on Bitcoin and the crypto industry, at times going so far as to proclaim Bitcoin as dead.
Bitcoin is not dead. In fact, it is more alive than it ever has been. The number of network addresses showing balances above 0.01 is at its highest point ever, north of 11 million. This is occurring amidst the largest market shock the industry has ever sustained.
The FTX fallout resembles previous fraud cases. Elizabeth Holmes, Bernie Madoff, and Enron are all cases that come to mind. These cases are evidence that fraud can occur anywhere: from healthcare, to financial services, energy companies and even government. This, however, does not mean that the industry or sector itself is fraudulent. It means that there’s a bad actor in an otherwise good industry. The FTX story will be no different and the mainstream media would do well to remember that.
Having said all of this, there is no doubt that the crypto industry will take some time to recover. Many enthusiasts just suffered significant losses, and their excitement (and portfolios) have been shattered. It will be up to the remaining players to rebuild trust with their clients. To do so, even more transparency will be required. Clients will rightfully demand more risk disclosures from all service providers.
Lenders, in particular, will tighten their covenants to minimize any future risks. Crypto still needs capital, and clients are looking for partners that will help them manage their holdings responsibly.
We founded Ledn in 2018 with the mission of making financial services accessible for people around the world who need it. Ledn exists to improve the lives of digital asset holders today, not just in the future. The events of the last few weeks have strengthened our commitment to this purpose more than ever before.
Mauricio Di Bartolomeo
Co-founder & CSO of Ledn
For more of Mauricio’s weekly commentary, please check out blog.ledn.io/en
This post is commissioned by Ledn and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.
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