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If bitcoin were a fighter, it would be one that refuses to give up, despite the punch it just received.
In recent weeks the cryptocurrency has taken a beating with the collapse of industry giant FTX and the arrest of its founder, Sam Bankman-Fried, in the Caribbean.
Bitcoin is used to taking a beating, but this “anti-establishment” fighter was already on the ropes after his most painful year yet.
Continuing with the simile, if cryptocurrency was a boxer, it would be lying on its back on the canvas. watching starsas.
He’s down, but is he finished?
From rags to riches
Bitcoin has a story that fits with a Rocky-esque plot.
image source, Getty Images
When it started in 2009 it was seen as something insignificant, but until recently bitcoin was considered a gold mine.
When she started out in the lawless world of internet forums in 2009 she was just a featherweight prospect.
There was a spark, but only within a rowdy niche of fans who were true believers and got almost nothing out of it: a few cents at first.
However, over the years its promoters grew, helping to develop bitcoin and fighting against the system.
The value of the cryptocurrency rose to thousands of dollars and it began to be recognized and welcomed in certain places. began to be accepted specialized websites or in trendy cafes.
Slowly, and against all odds, bitcoin became sought after, like a prized boxer.
Thousands of imitators also arose like ethereum, dogecoin and litecoinbefore bitcoin achieved extraordinary fame and value in 2021.
People invested money in it and all other cryptocurrencies. A bitcoin cost almost US$ 70.000.
The conventional system also began to open up to the possibility of investing in it and in other cryptographic projects.
But then, in November 2021, bitcoin began to suffer losses and has continued to worsen ever since, with continued blows and scandals leaving it at its lowest point in years in value, confidence and excitement.
“It is it’s a terrible time for the cryptocurrency space and we may see even worse days after the recent FTX scandal. This is a defining moment for cryptocurrencies,” said Stefen Deleveaux, President of the Caribbean Blockchain Alliance.
The FTX crash last month has been the biggest setback for cryptocurrencies in years.
It was the second largest exchange in the world – the entry point for millions of people to enter the world of cryptocurrencies.
was seen as one of the most reliable platformsbut collapsed days after its finances were revealed to be shaky.
FTX founder Sam Bankman-Fried is now in custody, accused by the United States of building “a house of cards on a cheat basiswhile telling investors it was one of the safest buildings in crypto.”
Bankman-Fried told the BBC that he hoped he had not killed cryptocurrency.
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The collapse of FTX, a company founded by Sam Bankman-Fried, has been the biggest setback for Bitcoin in its short history, experts assured the BBC.
FTX has certainly dealt a heavy blow, but 2022 has repeatedly pummeled cryptocurrencies.
“We have never seen anything like this in cryptocurrencies before”said Professor Carol Alexander, from the University of Sussex Business School.
She predicted last year that cryptocurrencies would crash in 2022, but admitted she was surprised by the sequence of events.
hit after hit
The first big hit came in May with the sudden collapse of two popular digital currencies that led to the removal of US$400.000 millions the value of bitcoin and the crypto ecosystem.
Do Kwon, the founder of the two terra coins, is now wanted by the South Korean authorities, who accuse him of hiding in Serbia.
Numerous other smaller scandals have shaken confidence in the cryptocurrency ecosystem, such as Kim Kardashian has been fined US$1.26 million for promoting a troubled currency.
The founder of the failed terra cryptocurrency, South Korean Do Kwon, is also being sought for prosecution.
There has also been the collapse of the previously booming non-fungible token market, with NFTs previously fetching millions now struggling to sell.
Massive hacks at crypto companies have also affected trust, and hackers robbed US$600 million from the Ronin network.
With the collapse in the value of bitcoin and other cryptocurrencies, large companies in the sector such as Celsius, Three Arrows Capital and BlockFi have filed for bankruptcyleaving small and large investors without money, and the police investigating what happened.
The price of a bitcoin, often seen as a barometer of how the entire ecosystem is doing, is now hovering around $18,000, a 70% drop from its peak in November 2021.
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US authorities said Kim Kardashian was paid $250,000 for promoting a controversial cryptocurrency without declaring she was paid for it.
Will crypto come back?
The fall of FTX and others leaves a huge void in the industry and a lot of jitters about other players.
Last Tuesday, December 13, more than $1.4 billion withdrew from Binanceapparently as a result of the negative headlines about cryptocurrencies.
The company’s CEO, Changpeng “CZ” Zhao, urged for calm on Twitter and said it was “business as usual”.
But Andy Renshaw, Feedzai’s senior vice president of product management, asserted that cryptocurrencies require a strong and diverse group of exchanges to survive this ongoing fight.
image source, Getty Images
Experts believe that cryptocurrencies will rise from the ground and recover the space that they had until a few months ago.
“Without a credible and trusted place to trade safely, cryptocurrencies are unlikely to return to title-fighting status, no matter the title,” he explained.
Digital currencies are of course only one part of the crypto ecosystem, but most of the forecasts about the increase in its value in the short term son pessimists.
Professor Omid Malekan of Columbia Business School acknowledged that things look bleak for cryptocurrencies as a speculative asset.
“Prices have come down and many of the biggest providers of investment-related services have gone bust,” he said.
After recalling that cryptocurrencies continue to be, above all, a technology, the expert asserted that if only this aspect is looked at, the balance is positive. “LIt’s going well, in some ways better than ever”.
Malekan recalled that the adoption of bitcoin and so-called stablecoins in developing countries without a reliable financial infrastructure shows that technology is improving lives.
Deleveaux also denied that the violent booms and busts of cryptocurrencies belie the general progress of these instruments.
And he pointed out how charities are using crypto to get funds to places where normal money can’t go due to conflict or repression.
He also explained that the latest scandals are “an opportunity to purge scammers” of cryptocurrencies.
“Crypto is basically a very short word for the future of the global digital economy,” Professor Alexander noted, citing the use of crypto technology in building metaverse environments that some think will be the future of work and life.
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