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2022-11-14 17:57:55

The Downfall of FTX Exchange & What To Expect Next? (Editorial)

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The last week in crypto felt like a lifetime. As it is, our investment was crippled due to the bear market, and we all were secretly hoping for a slow recovery.

However, one of the top crypto exchanges, FTX, turned out to be evil and misused users’ funds for their gain and eventually lost all of its users’ funds. It resulted in FTX halting withdrawals, and many innocent investors’ and traders’ funds were stuck in the FTX exchange.

It is impossible to guess if we will ever get the funds back. If you are one of those who lost your funds because of FTX, our love and prayer go to you.

I’m not going deep into why FTX collapsed, as many articles like this and this will help you understand what all went wrong.

I’m here to share some of my notes on how I see the industry, and this is just my understanding, so take it with a pinch of salt.

The Future impact of FTX Exchange Downfall

1. Cascading effect –

One thing is that the worse is not behind us. There will be a cascading effect just months after Luna’s crash. We heard the news about Celsius and Voyager’s platforms falling apart.

Many VC funds and investor/traders pooled funds are stuck, and the news is coming out every other hour of people losing their funds.

2. The advocacy for proof of funds –

The entire crypto industry is not rooting for centralized exchanges to share the proof of funds.

Nansen (An independent on-chain analysis report company) has worked with some willing crypto exchanges to publish this page where you can see all the funds’ exchanges hold in real-time.

3. More exchanges could fall –

I would not be surprised if we see more crypto exchanges fall because of this scenario. The best thing you can do is to move your funds to your private wallet.

You can use a hardware wallet like Ledger Nano X, or use the Trust wallet on iPhone. A hardware wallet is the best way to store your investment securely.

Crypto exchanges like Binance, Kraken seem safe, but you should keep only those tokens/coins on exchanges, that you are actively trading.

4. Rise of DEX’s –

This new scenario will lead to the rise of decentralized exchanges, and we will see an uptick in the growth of user activities.

Here is the updated chart from DefiLama

Pay special attention to the DeFi projects tokens, which might capture the benefits of the new influx of users.

Some of such projects are (Not investment advice)

  • UNI
  • AAVE
  • RUNE
  • CAKE

Wallet tokens like TWT is another category that will get a price boost because of this changing order. However, I see minimal merit in such tokens as they don’t have utility as of now.

Here are some of the top Decentralised exchanges –

  • Rango exchange
  • Uniswap
  • 1inch exchange
  • Pancakeswap

5. More regulations –

Well, FTX downfall not only impacted big money, but it also impacted retail users like you and me. And this will call for tighter regulations to save innocent users from burning their hands.

How and what it will be, only time will tell.

Why should you withdraw funds from all centralized exchanges?

The FTX downfall was unexpected, and news of many VC funds and investors losing their deposits on FTX exchanges is still coming out.

We don’t know who all have their funds stored on the FTX exchange, and chances are, they will not be able to access it again.

Binance is the safest at this moment, but you should only keep those funds on Binance which are intended for short to mid-term trading/investing.

For the funds you will be hodling for an extended period (ex: BTC, ETH), move those to a hardware wallet like Ledger Nano X or Trezor.

If you don’t have a hardware wallet and have an iPhone, you can use the Trust wallet (less secure than a hardware wallet).

Remember, we are seeing the Ripple impact of FTX downfall. The max damage is done, but there could be more damage if any significant bad news comes out.

Crypto.com, Gate.io, and Huobi seem sketchy as per today’s news and if you have funds, be cautious and better withdraw funds from these exchanges. This could be a noise and a false alarm, but you better be safe than sorry.

Not your key, not your coin!

Be safe, and best of luck!

You should join me on Telegram or CoinSutra’s Discord channel to keep yourself updated with the latest happenings.

Last words of wisdom –

Amid the chaos, there is always an opportunity. Have a contrarian view, don’t get emotional like the market, and keep looking for good opportunities.

News appeared first on: Coinsutra.com

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