The recent crises have affected Bitcoin and cryptocurrencies. Later, US regulators argued that this was a call for crypto rules. The repercussions of the FTX crisis continue.
Bitcoin and other cryptocurrencies fall
The price of the leading cryptocurrency Bitcoin fell below $16,000 this week. However, it has prompted serious warnings that the entire crypto market may be “on the way to oblivion”. Legendary Short’s Jim Chanos shared his views on the recent crashes. He emphasized what happened in the Bitcoin and crypto markets as the “dot-com era”. Also, Chanos claims that the FTX crisis is just the beginning.
Chanos, who correctly predicted Enron’s collapse in 2001, gives explanations with examples. Chanos conveyed what happened between FTX and Binance in his podcast with the following statements:
Cryptocurrency prices are financial fraud’s most loyal defense attorney and toughest prosecutor.
At the same time, the legendary name pointed to the capitalization, which was about $ 3 trillion 12 months ago, but fell below $ 800 billion:
It’s only when people start losing money that you start to get the public’s reaction.
Highlights the dot-com bubble of the 90s and 2000s
The dot-com bubble, known as broadcast, in the late ’90s and early 2000s led to huge spikes in technology and internet company stock prices. But after all that, the tech-heavy Nasdaq index lost almost 80 percent of its value. Chanos recalls issues from the past:
People have been losing money for about a year in the dot-com era. But until the Enron and WorldCom scandals broke, the Federal government really stepped up its efforts to look into corporate misconduct. Here we will see the same thing will happen.
As we have reported as Kriptokoin.com; Last week, world leaders talked about the rapidly growing Bitcoin and crypto industry. The leaders called for “critical” international rules. They also said that potential risks to “financial stability” should be mitigated. Meanwhile, US Treasury secretary Janet Yellen said in the aftermath of the FTX crisis:
We see it showing that crypto money markets need to be regulated more effectively.
The FTX crisis has exposed serious problems in the cryptocurrency industry
It seems that the crisis in FTX will continue to be talked about for a while. After the crash, other major crypto companies faced financial problems. Legendary name Chanos finally said the following about the victims and what happened:
People have lost a lot of money in the crypto market. Now it is necessary to regulate this system. I also think that different ways will be used to bring people to justice.
However, Chanos does not expect the declines in Bitcoin and the crypto market to spread to other aspects of the financial system.
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