The rapid implosion of FTX has led general investors and crypto believers alike to question the validity of crypto and, indeed, predict its end. But, an understanding of history points not to crypto’s demise but rather a move toward new technology and growth.
Financial markets move, as Willie Nelson once said, in phases and stages, circles and cycles. Companies develop ideas, grow quickly, ignite unwarranted investor euphoria and then implode — only to seed the ground for the next company, the next idea and the next growth phase.
Crypto is no different.
In 2010, an unknown person famously used Bitcoin (BTC) to buy pizza. After its initial launch, market capitalization grew to more than $12 billion when Mt. Gox’s 2014 hack and bankruptcy precipitated crypto’s first bear market. The market rebounded even more strongly, rising to a total valuation of around $3 trillion. It fell again this year in the wake of the collapse of Terraform Labs’ $50 billion ecosystem.
Today, FTX’s collapse and Sam Bankman-Fried’s (SBF) failure of leadership and basic sound financial practices have raised new doubts. Naturally, the crypto market has fallen in kind, plummeting to less than $1 trillion in market cap.
