Charles Hoskinson, the founder of Cardano (ADA), responded to the fall of FTX by speculating that it could be one of the final catastrophes to affect the virtual asset industry.
Hoskinson stated at a webcast on November 9 that occurrences comparable to the FTX issue are becoming increasingly sophisticated since they have an impact on other industry actors, but he added that the cycle may be coming to a conclusion.
Hoskinson went on to say that the fallout from the fall of the FTX market will probably be similar to what happened after the demise of the Terra (LUNA) ecosystem, which had an impact on businesses such as Celsius Network.
Hoskinson noted that “I think this might be the bottom, one of the last ones to deal with. It’s going to be hard to predict how bad it will be, and it could certainly potentially be very bad. There are not many more firms that were like FTX or Alameda or like, Three Arrows Capital, and so forth. At least in this cycle, I truly do hope that this is the last cycle of this nature.”
Hoskinson asserted that the fall of FTX was a result of the widespread aberrations in the crypto markets in the year before, notwithstanding the lack of information about the company’s insolvency. He went on to say “It’s just an example of the excesses that I repeatedly warned people about in 2021 and all throughout this year, in part prior points in my career, like in 2017, with ICO mania. You don’t get something for nothing in extremely high yield; it tends to evaporate very quickly.”
Hoskinson added that there is still a lot of work to be done and that Binance’s intended acquisition of FTX is not a cure. In the wake of the controversy, he also recognized, there will probably be increased regulatory pressure and increased monitoring of the high-profile occasion. He pointed out that “Situations like this, as I mentioned, do tend to invite litigation. They tend to invite regulation, and they tend to invite enormous scrutiny. <…> The purchase of FTX by Binance is no silver bullet. There are still many things that have to happen in order for this to be completely clear for the market.”
The Performance of the Crypto Market
Evidently, the demise of FTX has caused a significant increase in market volatility. The market lost over $100 billion in only one day, with cryptocurrencies such as Bitcoin (BTC) reverting at under $20,000 amid what is being called the crypto carnage.
In this sentence, Hoskinson predicted that the market could settle once more if Binance’s proposed acquisition of FTX is approved.
Hoskinson noted that the collapse is bad for the cryptocurrency sector overall and that authorities and investors will not only look at FTX but the entire digital asset market when evaluating the situation. He did, though, voice confidence that the market will most probably rebound given the technology involved and ongoing developments.