Cryptocurrency fell under bankruptcy

The cryptocurrency market continues its steady decline. Bitcoin fixed below $17 thousand, some experts allow a fall to $12 thousand, altcoins also lose their price. Overcoming the long-awaited bar of $100,000, analysts believe, if it happens, then not earlier than 2024-2025.

Bitcoin was trading at $16.5K as of November 13, according to CoinMarketCap, the lowest level since November 2020. Etherium lost 25% in a week, XRP – 28%, Cardano – 22%. Cryptocurrencies continue to fall amid negative news from the FTX exchange, which has been declared bankrupt, explains Andrey Podolyan, CEO of Cryptorg. “FTX and Alameda, one of the largest investment funds, are interconnected, and at the same time, many crypto projects in which they have invested are concentrated around the latter. Thus, a chain reaction followed, which affected the entire market,” he explained.

Both companies disposed of client funds too freely, literally “played them in an unknown place”, invested millions of dollars in various projects, supported crypto lending platforms that suffered in the spring after the collapse of Luna / UST, adds Alexander Peresichan, founder of Technobit and Satoshi Spirit. “How Alameda selected projects for investment remains a mystery,” he says. “Already in the summer, the crypto community began to ask this question and tried to understand whether Alameda had enough funds to fulfill all its obligations. Unfortunately, it turned out that neither she nor FTX, in fact, had any funds, except for clients’ money. Their companies threw each other, mixed with FTT coins and re-mortgaged to get some more liquid coins that they invested in other projects.”

Also, for the first time in a long time, there was a divergence between the crypto market and the American stock market, Mr. Podolyan clarifies. The stock market was going up and the crypto market was going down, “if not for the events with FTX, the past week could have been very positive for the bulls,” he explained.

As a result of the collapse of FTX and Alameda, “the prospect of a new bullish cycle in the crypto market is pushed far into the future,” Mr. Peresichan believes. They, in his words, “undermined the confidence in the industry of both retail and institutional investors.” The expert expects tightening of regulation in the leading capital markets – American, European, Asian – without fail.

The biggest impact on the price of bitcoin was the cascading liquidation of unsecured assets at the FTX exchange, Roman Kaufman, co-founder of Berezka DAO and Weezi, agrees. He names Wintermute and Galois Capital among the key funds that suffered losses, as well as Amber Group, which lost 10% of trading capital, and Multicoin Capital, which lost 9.7% of assets under management.

Bitcoin could soon fall to $15,000, Alexander Peresichan believes, before that happens, because “the market has not yet seen what kind of bankruptcies will follow the collapse of Alameda.” The expert also allows reaching levels of $12-13 thousand. At the same time, he clarifies, a short-term increase to $20 thousand is possible, due to the fact that those who were waiting for the bottom to enter the asset will immediately start buying back the coin when it drops to $15 thousand or less.

The next “bullish” cycle, according to Mr. Peresichan, is now “definitely not worth waiting until the end of 2023”: on the eve of halving (decrease in mining speed.— “b”) miners will start accumulating mined coins, there will be a shortage in the market, prices will go up. The main round of growth, the expert believes, will take place in the period of 12-18 months after the halving, when bitcoin will be able to update its historical maximum and finally overcome the long-awaited mark of $100 thousand. But this, Mr. Peresichan believes, is unlikely to happen before 2024-2025, or even never.

Ksenia Kulikova