Since the rapid collapse of FTX, a growing chorus has emerged predicting the end of crypto as we know it. In response to the FTX crash regulators have begun to really leverage the downfall into positioning themselves for future and frankly unknown regulation. Given all of the negative press it has been really interesting to watch the crypto markets response and the one clear thing that has stuck out to me is cryptos resilience at the end of the day.
By cryptos resilience though I really mean more of the people in the industry, the builders, traders, backers, etc. The FTX fall honestly gave a ton of people the ability to walk away but that is not something that we have really seen happen and the biggest indicator of this can be found in the price. Yes, when the news came out Bitcoin and others took a huge hit to the chin but since the initial shock, the price has arguably stabilized and shown signs of recovery.
Looking further into the price and comparing that to the US stock market as has often been the case we have seen the US DOW increase roughly 1,000 points or 3.03% as was at its low when the FTX and Bitcoin fallout began. Bitcoin on the other hand fell and hit a low of roughly $15,800 and has since recovered roughly $1,330 to $17,130. That is a recovery of over 8.4% and has really shown signs of "sticking". This recovery has occurred even in light of the ongoing fallout from FTX, the launch of investigations, the talks of in some situations strict regulation, and ongoing economic uncertainty. For the US markets, the only issue facing it falls into the ongoing economic uncertainty as the other issues are isolated to the crypto and blockchain space itself.
Even today where the markets have gotten hit by the November economic data, the producer price index showed wholesale prices increase of 0.3% topping the expectation of 0.2%, and the Core PPI rising 0.4% over an estimated 0.2%, the crypto market has continued to hold firm. By not getting massively hit by these numbers like the markets have crypto is really starting to show its resilience in an environment where inflation is showing to still be an issue and with the Federal Reserve Chairman continuing to say he will continue to hike rates until this inflation goes down. Calls have been made before that crypto needed to separate itself from stocks and to me, this just further shows that it is really beginning to operate independently. Not to mention Bitcoin in particular continues to be accumulated by smallholders at levels that have not been seen before and admittingly I am one of them!
Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to support me further below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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