FTX is the newest addition to those whose prospects are unclear due to the slump in digital currency prices, exposing the risks of the aggressive financial approaches that generated the crypto and NFT surge.
On January 1st 2022, one Bitcoin was valued at approximately $46,000. However, by November 8th of the same year, the worth of the same coin had plummeted to $18,500. This marked the beginning of the most stunning crypto tale of the year: the continuous deterioration of the FTX exchange, which posed grave risks to the crypto industry in general.
This year has been a disaster for crypto, with plenty of scandals. The Luna/Terra crash wiped out billions in an instant, while Axie Infinity’s hack cost it a staggering $625 million, and it’s been hard for them to get back on their feet. Celsius and Three Arrows Capital have also sunk. Who would’ve guessed that the previously cool NFTs with their JPGs wouldn’t be worth so much?
As the economy returned to its normal state and people’s risk preference decreased, crypto went from an entertaining investment to a hazardous gamble following the pandemic-induced surge in stock prices. Of course, this happened as the overall economy started to decline.
Crypto has plummeted in the past, and the long-term believers are still maintaining that there is more growth to be had. Nonetheless, the outlook for all types of digital currency is currently rather dismal.