QTR’s Fringe Finance: After FTX’s Collapse, Expect Crypto Armageddon To Continue

For those that have been reading my blog carefully over the last year, it should come as no surprise that we are witnessing more collapses in the world of crypto, exemplified this week by the sudden implosion of FTX.

Remember, I wrote back in June, in the midst of bitcoin’s crash, that “secretly insolvent” crypto firms had already gone bust and we didn’t even know it yet. In that article, I cited analysis from FTX founder Sam Bankman-Fried himself. Little did I know that Sam was referring to himself.

READ: “Secretly Insolvent” Companies Ensure Crypto Chaos All But Certain To Continue

In the same article, I did what I have been doing for the last 4-5 months: cautioning people that the $20,000 “floor” in bitcoin, as I have heard it referred to as, must hold, otherwise the chaos on crypto “investors” and companies would be visited two-fold on those who doubled down after the crash earlier this year:

As I said on my podcast last week and my brand new podcast with Mark Spiegel, everybody is acting as though this $20,000 level is the definitive floor. Refinancings, bailouts and consolidation have all taken place and people are starting to reposition themselves to the long side under the impression that the chaos is over.

When bitcoin falls another 50% from here, if it does, will see some real shit hit the fan – including potentially unprecedented investor panic – in the asset class. That, in turn, will trigger another round of insolvencies and bankruptcies in the space. Maybe then we can talk about consolidation for a while.

I concluded by saying:

But remember, the lower that bitcoin goes, the bigger and more prominent the names will be that blow up – which becomes a self-fulfilling prophecy in the wrong direction.

And here we are, with the ruined remains of FTX – considered just days ago to be one of the largest and most responsible crypto names, the company responsible for consolidating all the crypto distressed assets of earlier this year – torched in the background.

READ MORE HERE