Since FTX's collapse, crypto investors are now questioning the reliability of keeping assets on digital asset exchanges.
👉 Background: We know that FTX went from a $32 billion valuation to nothing almost overnight after a major liquidity crunch...and potentially some fraud.
👉 What happened: Now, a whole heap of crypto investors are questioning the reliability of keeping assets on digital asset exchanges.
👉 What else: And this ain't the only bank run. Supposedly a number of Australians are withdrawing their money from Singaporean Crypto exchange, Crypto.com and this could spark contagion among a number of digital asset exchanges.
💡Similar to a contagious disease, contagion in the economy occurs when a particular financial shock spreads from one industry, market or region to another.
💡And when it comes to crypto, this contagious disease, which started with FTX, could spread across the whole crypto market.
💡So far this year, we’ve seen the downfall of tokens like Luna and crypto exchanges like Voyager, Blockfi and now FTX. And while many haven’t lost faith in cryptocurrencies themselves, they certainly have lost faith in the exchanges that hold keys on your behalf.
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