The bankruptcy of FTX, one of the largest cryptocurrency exchanges, wreaked havoc on cryptocurrencies
This bankruptcy dragged down cryptocurrencies, leading the largest of them all, bitcoin, to accumulate a loss of 77% in the last year.
Is this the end of cryptocurrencies? It is possible, but unlikely. The crypto market is the youngest, most volatile, least known and most risky, which makes it difficult to compare with others. Last year’s drop, which Bank of America considers the fifth largest in history, is only the fourth largest drop in bitcoin in the last decade.
Cryptocurrencies are legal almost everywhere in the world, except in six countries, and are increasingly regulated and widely adopted by citizens, businesses and governments. Around 20 banks worldwide, almost all in the Americas and Europe, hold some $10 billion in cryptos.
The international body that sets solvency standards for banks worldwide, the Basel Committee on Banking Supervision, does not ban cryptocurrencies, but recommends limiting their exposure to 1% of their capital.
Moreover, they represent an opportunity for two billion unbanked people to access financial services and for people in countries in crisis to safeguard their funds.
Another fact to bear in mind is that 60% of cryptocurrency holders are under 30 years old and more and more organisations and companies around the world are accepting them to pay for goods, services, payroll or taxes.
On Mediodía COPE on 30/12/2022, several experts were consulted on the situation of the crypto market:
Herminio Fernández, CEO of EurocoinPay, believes that the crisis that cryptocurrencies are suffering at the moment is a readjustment of the crypto market.
The future of cryptocurrencies may seem uncertain, but it has solid foundations. The bad news could reflect a cleansing process of a crypto market that has grown too fast, as happened with the dotcom bubble.
What if this is not the end of cryptocurrencies, but just the beginning?
What do you think?
Source: Cope.es
Disclaimer: The information set out herein should not be taken as financial advice or investment recommendations. All investments and trading involve risk and it is the responsibility of each individual to do their due diligence before making any investment decision.
