Crypto Market: Upheavals and Forecasts

Let’s be honest, the crypto market has been facing several significant shocks and challenges in recent times including the FTX crash, Goldman Sachs buying up crypto businesses, and a prolonged crypto winter. 

Undoubtedly, these events have had a significant impact on the market and have raised questions about its future prospects, so in today’s article, we’ll take a look at what is really happening in the industry as well as lay out some forecasts about the market. 

2022 – A Real Crypto Minefield 

The crash of the FTX cryptocurrency exchange is only the most recent in a series of problems culminating in the crypto winter of 2022. Due to inflation, rising interest rates, and economic uncertainty, investors have been selling risky assets such as stocks and cryptocurrencies all year. 

Let’s not forget about Three Arrows Capital, a Singapore-based crypto hedge fund, and Voyager Digital, which both declared bankruptcy after the demise of algorithmic stablecoin TerraUSD in May, when selling revealed overleveraging in the market for crypto lending for the first time. 

After that, Binance's selling exposed FTX's excessive borrowing and sparked a liquidity crisis that was too much for the exchange to bear.

As a result, we witnessed a massive crypto failure, with founder Sam Bankman-Fried stepping down after the once $32 billion company FTX filed for bankruptcy on November 11.

FTX, along with 130 of its affiliated companies including Alameda Research, a trading firm owned by Bankman-Fried, filed for bankruptcy protection.

The crash highlighted the potential risks and vulnerabilities of the crypto market and raised concerns about the reliability of crypto exchanges.

Furthermore, ConsenSys, one of the companies behind the Ethereum Merge, recently revealed that it also gathers user information for MetaMask, one of its on-chain wallet services. Uniswap DEX has made a similar change to its privacy policy. 

According to ConsenSys, it gathers information that can be used to identify a user, such as contact information, profile details, and other user data.

However, in the middle of the crypto chaos, some of the initiatives are looking for opportunities to leverage these circumstances to their advantage.

Namely, Goldman Sachs, one of the world's largest investment banks, plans to invest tens of millions of dollars in cryptocurrency firms whose valuations have declined since the collapse of FTX.

"We do see some really interesting opportunities, priced much more sensibly," - Mathew McDermott, Goldman's head of digital assets. 

Reportedly, Goldman Sachs has issued a $104 million digital bond for the European Investment Bank and invested in eleven digital asset companies that provide services like compliance, cryptocurrency data, and blockchain management.

When Is the Bull Run? 

This fact highlights that investors still believe in the technology behind crypto, and there is a good chance of the market bouncing back during the next year.

Of course, the prolonged bear market has led to a significant decline in the value of digital assets and a decrease in the interest of users around the world. In the opinion of industry experts, the cryptocurrency market can only recover if economic pressure points subside. 

It’s quite scary to put your money into something so unstable, isn’t it? 

Final Word

Overall, the crypto market has faced several shocks and challenges in recent months.

While these events have raised concerns, they have also underlined the potential of the technology, and the need for continued innovation and development.

As the market continues to evolve, it will be essential to address these challenges and find solutions to ensure its long-term success and create favorable conditions for the bull rally.