Bitcoin (BTC) and cryptocurrencies may “take years to recover” from the FTX scandal, an industry analyst warns.
In a twitter thread On Nov. 11, Filbfilb, co-founder of trading suite Decentrader, said that the Terra LUNA debacle itself was still unfolding.
Filbfilb: “I have never seen such a debacle”
The cryptocurrency sector is experiencing “a clear case that what goes up must come down,” summarizes Filbfilb.
As the fallout from FTX and Alameda Research begins to become apparent, many companies in the industry and associated tokens have been reduced to a shadow of their former selves.
Amid bankruptcy concerns for those with exposure to FTX and investigations by regulators, the outlook looks bleak for the reputation of the industry.
For Filbfilb, FTX-Alameda is itself a product of the implosion of Terra, Three Arrows Capital and others earlier this year.
“1) Most of all this dates back to the first 3 AC/Celius collapse,” he began.
He highlighted two other key causes:
“2) Companies in space compounded their aspirations based on the supernormal growth of parabolic industry. 3) Cash is king; the cash flows of many entities have been reduced by 80%”.
The situation is, in fact, all too familiar; overly eager companies create an ecosystem on steroids, growing too fast and taking too much risk.
“Price, users, cash flow, and compounding, cross-collateralized businesses, using rapidly declining assets as balance sheet assets with future obligations, works when the price goes up: it’s suicide when the tide goes out,” he continued. Filbfilb.
For this reason, so that the cycle does not repeat itself, “many years” of restructuring may be necessary.
“So yeah, I’m upset about the whole thing, I’ve never seen a debacle like this, I understand why we are where we are, but it’s inexcusable by some of the people involved and they need to be held accountable.” concluded.
Former FTX Sales Manager Rejects Bankruptcy ‘Boomer Proceedings’
Feelings are tense for countless investors and companies with funds tied up in now-frozen FTX accounts.
On Nov. 11, Zane Tackett, the exchange’s former head of international sales, confirmed that the gross liability stood at -$8.8 billion.
In a twitter thread own self, asked users if FTX should create a “cool token” as a way to restructure debt instead of filing for bankruptcy in the traditional way, calling it “boomer procedures”.
“There is no way to paint a pretty picture of these numbers, but when I saw the balance this afternoon I thought it was going to be much worse,” he revealed.
“Now, of course, there is a massive hole in liquid assets, there are a lot of changes in portfolio companies.”
Less than an hour after publication, the survey had amassed 3,100 responses, with 71% asking for token creation.
Such a move would be similar to that of Bitfinex, which in 2016 launched its UNUS SED LEO token after it was hacked for $70 million worth of BTC.
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