Crypto is collapsing and it’s been a very tough year for cryptocurrency holders as exchanges face the possibility of bankruptcy.
BlockFi is preparing for potential bankruptcy after halting withdrawals of customer deposits and acknowledging it has significant exposure to the now bankrupt exchange FTX, per the WSJ.
BlockFi paused withdrawals and limited activity on its platform last week, saying it couldn’t operate business as usual given the uncertainty surrounding FTX.
The exchange is now planning to lay off workers as the troubled firm prepares for a possible chapter 11 bankruptcy, said people familiar with the matter.
The Coinbase Pro cryptocurrency platform is also shutting down for good, per NerdWallet.
And a Hong Kong-based AAX crypto exchange is suspending all of its operations, per Watcher. Guru.
Crypto has had its ups and downs, but what’s occurring today seems like it’s going to have a longer effect on investors.
Should investors take their money out of crypto now?
Let’s discuss it.
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Bitcoin Magazine Warns Investors
Just $3.7 billion Bitcoin were taken off exchanges last week per Bloomberg.
Bitcoin had fallen below $16K and is now trading just below $17K.
Now venture capitalists who invested in FTX are considering suing Sam Bankman-Fried for alleged fraud.
Confidence in the crypto space has fallen amidst the collapse of these exchanges.
The worst part is the number of investors who have been caught up in this mess.
According to the Washington Examiner, celebrities such as Tom Brady have lost most if not all of their investment in FTX.
Other athletes include Stephen Curry who had also signed previous agreements with FTX to promote the company.
Now Bitcoin Magazine and Unusual Whales are saying to get your money out of Bitcoin and crypto exchanges, signaling that matters could get worse before they get better.
Will Crypto Go Back Up?
The current crypto crash we’re seeing today has been the result of centralized financial errors, according to CoinDesk.
“The meltdown of Sam Bankman-Fried’s crypto trading empire could not, and would not, have happened to a decentralized and transparent protocol”, says the Amanda Cassatt.
JP Morgan has also identified centralized players as the root cause of recent crypto collapses.
Will cryptocurrencies go back up?
With time and with investor confidence, the crypto market will eventually recuperate.
Should investors take their money out today?
This is going to depend on the individual’s need for liquidity.
With an economy that is currently fighting inflation, and unemployment rates rising, having capital at hand might just prove to be useful as today’s uncertainty only becomes more uncertain.
But I’d love to hear your thoughts on this.
Let’s start a discussion, leave your thoughts below.