As per Bitcoin advocate Samson Mow, the failure of FTX has caused a significant decline in the value of Bitcoin, but this does not suggest that BTC can be annihilated by failed cryptocurrency enterprises.
The crypto sector is still experiencing the effects of the FTX outbreak, and it is expected to suffer more comparable collapses in the coming months, according to Mow in an interview.
As stated by the CEO, the FTX epidemic could be a result of the Terra ecosystem’s downfall, which had a ripple effect on the sector, including large cryptocurrency lenders such as Celsius as well as Voyager.
More of this may occur in the cryptocurrency space because every one of these initiatives are meaningless houses of cards, according to Mow. He went on to say that FTX’s downfall was easily foreseen because of the company’s relationship with Alameda.
According to JAN3 CEO, a basic rule of thumb is that if a corporation creates a coin out of pure nothingness and then either distributes it to retail or depends on it as a commodity, you can anticipate it to collapse soon.
Mow also claimed that the industry’s efforts to demonstrate credibility — such as marketplaces increasingly revealing evidence of reserves — are meaningless unless they also demonstrate liabilities. Any process that can be bypassed may be gamed, he said, referring to participants misrepresenting their reserves by moving funds around immediately before presenting proof.
Then, there’s the fiat side, which would necessitate an audit, but it might not be beneficial, either because FTX also has an auditor, he said.
As the FTX epidemic spreads across the sector, the worst-case possibilities for a number of the world’s major cryptocurrency enterprises are likely. In response to the topic of whether Bitcoin could withstand a hypothetical case in which crypto heavyweights such as Tether or Binance collapsed, Mow expressed optimism that Bitcoin is built to overcome any challenge, stating that:
Bitcoin should triumph over any problem simply because of its configuration and the indisputable need for solid currency in human civilization. Any collapse of a behemoth would simply be a momentary setback, much as Mt. Gox’s impact has faded.
Despite possibly pushing the cryptocurrency market back a few years, Mow believes the FTX crash has done amazing things for the Bitcoin business in terms of accelerating the acceptance of self-custody and personal wallets. Regrettably, most individuals can only benefit from their own misfortune, not from the faults of others, he noted.
The executive also recommended that new arrivals to Bitcoin are probable to commit the same mistakes in the long term, despite the sector revealing the greatest threats of trading platforms throughout Bitcoin’s first crash in 2011. He stated:
Then, over the coming years, things may settle down, and new arrivals would then repeat the same mistakes and lose their money. Repeat as necessary.
Mow is the creator of the game production startup Pixelmatic and the former head strategy officer at Blockstream. He also serves as the CEO of JAN3, a Bitcoin tech startup dedicated to advancing Bitcoin and driving hyper-Bitcoinization. The company struck a deal with the government of El Salvador and Governor Nayib Bukele in April 2022 to assist the country to expand digital infrastructure and establishing Bitcoin City.
The Bottom Line
There is a variety of crypto marketplaces that have recently experienced significant turmoil. This has all occurred throughout the last year, and a variety of crypto marketplaces have experienced some difficulty, with many becoming insolvent.
However, some crypto experts believe that regardless of what happens in the space, Bitcoin should be able to survive all the problems currently facing the space. Whether or not this is true remains to be seen; however, the majority of crypto marketplaces that have failed tend to use other stablecoins rather than Bitcoin, which bodes well for their claim.
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