Over 10 years we help companies reach their tech goals. Devonfertech is a value-driven technology agency dedicated.




+1 -868-37-DEVON

Crypto News

Arthur Hayes Says FTX is Now Beyond Saving

Former BitMEX CEO Arthur Hayes believes FTX is ultimately headed for bankruptcy now that Binance has refused to rescue the company. 

The exchange co-founder offered his analysis of what the future holds for FTX on Thursday and offered some predictions for how its crisis will impact the market. 

FTX Will Go Bankrupt

In a Twitter thread on Wednesday, Hayes asserted that there is no player large enough to buy out FTX, if Binance’s CEO – the richest man in crypto – was unwilling to do so. 

Binance signed a non-binding letter of intent with FTX on Monday agreeing to purchase FTX, and help it during its “liquidity crunch.” However, the firm almost immediately backed out of the deal following an alleged government probe into FTX, and a review of FTX’s handling of customer deposits. 

Around the same time, a report emerged from the Wall Street Journal that FTX’s CEO, Sam Bankman-Fried, told investors the exchange owed depositors $8 billion. Given the magnitude of the situation, Hayes doesn’t like customers’ odds of getting their money back any time soon. 

“FTX customer deposits will only see recovery in a bankruptcy court, and that will take many years to sort out,” he predicted. “Mt Gox creditors still haven’t received funds and it’s been almost a decade.”

Mt. Gox is a former Bitcoin exchange that went bankrupt in 2013 after losing hundreds of thousands of its depositors’ Bitcoin. To this day, creditor repayments in Bitcoin and Bitcoin Cash are still being sorted out

Hayes believes that exchanges will begin to guard their client’s assets more closely from now on. Indeed, multiple exchanges have already announced plans to implement proof-of-reserves systems, including Binance

In the short term, however, Hayes expects trading firms with exposure to FTX to reign in the number of venues they operate with. “Orderbook liquidity will fall,” he said. 

Where Does the Market Go?

Bitcoin marked its lowest price in 2022 in the wake of FTX’s fallout, falling under $16,000 on Wednesday. 

However, crypto markets recovered slightly on Thursday after October’s CPI print showed declining inflation levels, signaling to investors that the Fed may be a step closer to slowing its interest rate hikes. 

Still, Hayes expects markets to “puke” lower as the contagion from FTX’s insolvency spreads throughout the industry. He warned any investors with funds deposited into firms that may have exposure to the company to withdraw their assets immediately. 

“I have been trading crypto for longer than I have been trading TradFi, and I am still speechless about what is going down,” he concluded. 

On-chain data on Thursday indicated that FTX may have resumed processing withdrawals after pausing them on Tuesday.

Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

Source link



Leave a comment

error: Alert: Content is protected !!