The Latin term “luck in favor of the brave” has become a slogan for advertising in the actor’s mouth Matt DamonHe promoted the virtues and benefits of investing in cryptocurrency in 2021. The luckiest are those who ignored it and saw what happened in just 365 days.
Cryptocurrency bubble burst. Binance’s fear of bailing out FTX immediately caused this to happen bankruptcy filingbesides the Resignation of its CEOFormer billionaire Fried Sam Bankmanwhich until weeks ago had held onto the belief that it could save a ship with a very large hole.
These are the latest symptoms of a market that has promised big profits and which is currently suffering from such a general capital flight that it has left savings More than 8000 million blockedwith characters like the model Gisele Bundchen Her husband is an American football player Tom Brady or a basketball player Stephen Curry among those affected. The number of “victims” is not clearly known, but it may be Reaches 1 million users.
Data is devastating: Bitcoin has shifted $69,000its highest level ever at the end of 2021, to fall to about 17600 current: The price is generally reduced by 70%.. The rally is in large part due to how FTT, the cryptocurrency for FTX, has gone from trading at $80.49 to $4.23. This is the breakdown of nearly 97%.
FTT is not the only cryptocurrency to suffer losses: all the top ten have been dropping in recent weeks, with sunbathing (-30%) ahead polygonal (- twenty%) , raised (-18%) and Dogecoin (16%).
Investors panicked, especially as they predicted that months of warnings would be nothing more than a ‘cold’ case of global financial uncertainty than the cryptocurrency market itself. Many did not see this as a symptom of banning many countries, especially China Cryptocurrency mining and trading. It was a flu that ended up becoming a fatal thing for his business.
FTX case, which was Fourth exchange company for cryptocurrency world, typical. In June 2022, FTX bailed out Alameda Research, which in fact absorbed it, using money from its investors and no less: it was 10,000 million, 62% of the money of its investors. At the same time, Celsius and 3ARROWS Capital declared bankruptcy.
FTX saved Alameda Research using 62% of investors’ money, who lost almost all of it
even so, Fried Sam Bankman, the founder of FTX, went on to merge with Alameda Research and wound up as well. He asked Binance for help, but as soon as he saw the balances, Binance discovered a hole that was impossible to cover. His trip has increased the mistrust of investors or those interested in being one. With the fall of FTX, FTX, Alameda Research, and about 130 group companies, so the consequences could be dire.
F1 ‘predecessor’ bankruptcy
up to balance Very Democratic Party of the United StatesWith Bankman-Fried being one of its most important donors, it’s already costing collateral casualties in areas that have nothing to do with the economy, in the case of Formula 1: So far, FTX has been a sponsor of the Mercedes teamwhere the seven-time world champion competes Lewis Hamilton.
At the dawn of the start of the Brazilian Grand Prix, they found out the news and had to remove the stickers on the individual seats. Binancewho put the final nail in the coffin for FTX, is a sponsor of Alpine, the team he competes in (until he turns into an Aston Martin for 2023) Fernando Alonso.
At the moment, experts are waiting and asking for calm, and above all, those who want to invest in this currency format should wait a little longer or abandon it directly.
For those who have already put their savings there, they can only recommend a prayer: The snowball started to roll and it seemed unstoppable.
Tulip bubble… again
No financial market, regardless of its currency and in the historical period in which it occurs, declines overnight. One of the first cases of economic bubbles in the style of the current bubble occurred in the seventeenth century, in the so-called Tulip Mania in the NetherlandsWhen speculation in the sale of tulips caused many bourgeois and nobles to lose all their savings.
This was a warning that, after several centuries, no one paid attention to: it was repeated with him The collapse of 29 and now with the cryptocurrency market. The behavior is very similar in all cases: a product (financial or tangible) is bought cheaply on a large scale, its price rises due to pure supply and demand and the first to sell makes a profit. Those who slow down (because they wait for prices to continue rising to earn more), are more likely to see their savings decline.
Both in the case of tulips, as in the case of 29, as in this case of cryptocurrencies, the same principle is repeated: Greed is the main ally and the main enemy of speculators who make the same mistake periodically.