What Ex-FTX CEO's Guilty Verdict Means For The Crypto Markets And Retail Investors
Almost exactly a year since FTX collapsed, its founder and former CEO was found guilty on multiple counts of fraud. While this verdict was expected by many, what does it mean for the future of the cryptocurrency markets and more importantly retail investors putting their money in them?
Despite the carnage in the crypto market last year, the asset class has enjoyed a rather positive 2023, especially when it comes to bitcoin, and this verdict is unlikely to change that immediately. But it may also be giving some retail investors some false hope.
«I do think that most retail investors fail to understand right now that there are still a significant amount of assets within the holdings of both FTX and Alameda that have yet to be liquidated,» said Aaron Rafferty, CEO of StandardDAO, in an interview.
The actual impact on prices of crypto such as bitcoin, ether and XRP will depend on when the liquidations begin, how much is sold, and how quickly. But Rafferty said they could end up hurting retail investors «that are looking at this verdict and saying, 'Wow, yeah, market as usual, let's buy, this is a great signal,' when truly it's, it's not yet.»
The immediate fallout of the FTX bankruptcy was called crypto winter, which may be over. Volatility in tech stocks and a rebound in crypto prices, mainly bitcoin, saw investors cautiously return to crypto in October.
But investors shouldn't be too quick to restore their faith in crypto after this verdict.
«Crypto exchanges remain largely unregulated, and investors should not leave their crypto on exchange. You can and should take custody of your own assets. Use exchanges to trade but then remove them to your own wallet,» Peter Eberle, CIO and President of Castle Funds, said in an
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