Oh crypto geeks haven’t you had an exciting year? With the recent news that even the accountants and auditors of the mega-crypto financial firms have suspended working for them in vouching for the “reserved assets” – aka hand waving around indicating worth – and more uber-entrepreneurs in the field now exposed as mega-frauds, its a hard time for the crypto-faithful.
From the BBC:
FTX’s collapse last month has been the biggest shock to crypto in years. It was the world’s second largest exchange – the entry point for millions of people to get into crypto. It was seen as one of the most trusted platforms, but collapsed into bankruptcy in days after its finances were revealed to be unstable. FTX’s founder Sam Bankman-Fried is now in custody, accused by the US of building “a house of cards on a foundation of deception, while telling investors that it was one of the safest buildings in crypto”.
The lead star of the crypto-currency craze, Bitcoin, had not been enjoying market frivolity this year even before the collapse of FTX and it bears (sic) looking at the trajectory of the tulip-coin again if you’re still thinking of buying your loved ones a coin or two for Christmas:
A year ago, Bitcoin was traded nearly three times higher at close to $45K per coin, instead of the sub $17K number its wallowed at for most of the second half of this year.
Ethereum, Bitcoin’s main competitor, is in a similar position, having traded down from $4000 to just over $1200:
These are classic bubble charts, almost textbook perfect, with a reversion to the pre-bubble launch points the most probable end game.
In fact, I’m sure many books will be written on this speculation phase of the crypto currency evolution. Whether or not it can adapt to the next phase is an unknown known.