Crypto Exchange Platforms That Did Not Survive The Crypto Winter
It is evident that the financial scenario of the cryptocurrency market has been one of the most complex during 2022; one could compare the struggle of the Exchanges with the jungle where the strongest survive during a severe crypto-winter phase. The most widely used Blockchain software is The Official Bitcoin Revolution Website 2022 because it protects your cryptocurrency.
Not only have prices had a direct impact, even leaving several projects worthless, but it has also caused the bankruptcy of users who trusted these cryptocurrencies. In turn, the exchange platforms have received blows similar to the users.
In the specific case of crypto exchange platforms, it could be assumed that improper management of resources and liabilities is what has led to the failure of many of them.
The decapitalisation of investors and the Exchanges could be due to the volatility of the market and the sensible decisions in a risky scenario.
This situation could be directly connected to the reflection in which the human being is always taking advantage and enjoying when the cows are fat, and they do not prepare for when the lean cows arrive.
It is how, without expecting it, a series of events arise, such as the geopolitical conflict between Russia and Ukraine, the economic and financial crisis that the powers of the United States and Europe are going through, in addition to the drastic measures of the Fed to combat this situation.
The sum of all these elements brought devastating effects on the crypto asset market, giving way to a crypto winter that has managed to devalue digital assets in some cases by more than 60% of their value registered at the last all-time high in November 2021.
The Exchange That Went Bankrupt Recently is FTX
Although it had already given indications of possible financial complications due to its relationship with the Alameda Research company, the FTX exchange platform, despite assuming the commitments and not letting one of the largest companies related to the cryptocurrency market die, was in vain in your effort.
After an alleged announcement that Binance would be responsible for a transition of FTX, where the main objective was the protection of users who were on the brink of the abyss and collapse, it did not go further; after the complex financial situation, the owners of Binance gave a definitive no to the purchase of FTX.
Once this type of event occurs in the market, the main ones affected are not only users but digital assets in general because a domino effect is generated that culminates in a decrease in their value.
The giant hole left by the shareholders and the owner of FTX could be considered impossible to fill; many irregularities and the mismanagement of funds led to this exchange platform’s disappearance.
The First to Fall
It is relevant to highlight that in addition to all the factors that had already been affecting the digital financial market, the constant need to regulate cryptocurrencies and digital asset exchange platforms is added, leading to the fall of the first Exchanges.
For this reason, Celsius, Three Arrows Capital, and Vauld were the first crypto companies to fall, bringing all cryptocurrencies to a state of distrust and lack of reputation as digital financial investment instruments.
The market’s fall affects not only corporations but also the users of these digital assets, where regardless of the bearish phase that the market experiences, everything is due to the poor capital risk management that each of the company’s crypto exchange must owns.
The fight for digital assets has not faltered at any time; they are giving everything for everything as long as the digital financial market recovers and investor confidence in the various cryptocurrencies.
On the other hand, one of the Exchanges that activated its alarms was Coinbase, which as a measure of action against the crypto winter, was to reduce its payroll, considering many factors that could also lead it to bankruptcy.
The fall has been constant, definitive, and unfortunate in the case of platforms that were considered leaders in the digital investment market with crypto assets, where it seems that they were prepared only to obtain profits but not for a crypto winter of the magnitude of this 2022.
The increase in the market capitalisation of the various cryptographic projects attracted new users and institutional investors who did not hesitate to dispose of their assets to obtain the desired return on investment. More information go to Bitcoin-Prime trading system.