After FTX collapse, cryptocurrency sector fights back
The failure of the FTX platform has undermined investor confidence and threatened the young cryptocurrency sector, pushing its main players to mobilise to save it.
The boss of the largest cryptocurrency exchange platform, Binance, did everything to reassure investors on Tuesday.
"The projects that survive this difficult time will be much stronger later on," said Changpeng Zhao in response to questions from Internet users on Twitter.
But for now, the market is shaken.
Cryptocurrencies are valued at $870 billion, according to data from Coingecko, a site that lists more than 13,000 of them through 600 exchanges.
Less than ten days ago it was over $1 trillion, and at its highest a year ago, $3 trillion, most of which evaporated as bitcoin prices crashed (- 74% over one year), but also Ethereum (-73%) or Dogecoin (-67%).
The bankruptcy of FTX, which even in early November was still considered one of the most reliable platforms, is a reminder to investors of the sector's uncertainty.
The company must liquidate its cryptoassets and its stakes in companies to pay off its creditors, flooding the market.
Cryptocurrencies are already recovering from a similar crisis in the first half of the year when the cryptocurrency Terra saw its price collapse, dragging bitcoin down with it.
But this time around, FTX was an even bigger player.
"There are parallels to be drawn with Lehman Brothers", the Wall Street giant whose bankruptcy in 2008 amplified the financial crisis, said Walid Koudmani, analyst at XTB, who told AFP that the possibility of an outright end to cryptocurrencies may even arise.
The fall in cryptocurrencies, however, comes in a rising global market, and seems to indicate that cryptoassets are not yet significantly correlated with the
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