Bitcoin
BTC
and crypto markets have suffered an almighty crash in the aftermath of FTX’s shock implosion—with president Joe Biden leading calls for game-changing crypto rule changes.
The bitcoin price has dropped under $15,500 per bitcoin while the ethereum price is sliding toward $1,000 per ether (despite Elon Musk issuing a surprising 2023 price prediction).
Now, as the combined crypto market dips under $800 billion for the first time since late 2020, Nobel Prize-winning economist Paul Krugman has warned the bitcoin and crypto industry could be “headed for oblivion.”
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The combined bitcoin and crypto market price has crashed under $800 billion, sparking fears bitcoin … [+]
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“It’s hard to see what advantage these firms would have over ordinary banks,” the Nobel laureate and retired Princeton professor wrote in a New York Times
NYT
column that asked if this is “the end” for crypto.
“Even if the value of bitcoin doesn’t go to zero (which it still might), there’s a strong case that the crypto industry, which loomed so large just a few months ago, is headed for oblivion.”
The FTX collapse, following a brief tussle between FTX founder Sam Bankman-Fried and the chief executive of rival exchange Binance, has left the bitcoin and crypto industry reeling, with rumors swirling other major companies could be about to follow FTX into bankruptcy.
FTX’s sudden meltdown has also sparked calls for regulation that would better protect crypto users after many lost access to their crypto funds on FTX and other crypto companies that were forced to suspend withdrawals to weather the storm.
Last week, as U.S. president Joe Biden lead G20 calls for stricter global crypto rules, U.S. Treasury secretary Janet Yellen said the fall of FTX “demonstrate[s] the need for more effective oversight of cryptocurrency markets,” adding that the same protections offered in traditional markets should apply to crypto assets.
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The bitcoin price has been on a steep downward trend over the last year, dragging down the ethereum … [+]
Forbes Digital Assets
Many in the bitcoin and crypto space have also called for regulatory clarity to better protect customers and root out bad actors.
“If crypto is to survive, we will need to see an agreed form of regulation that comes from within the industry and is overseen by regulatory bodies such as the U.S. Securities and Exchange Commission (SEC) and Federal Deposit Insurance Corporation (FDIC), to ensure proposed standards are maintained,” Anna Becker, the chief executive of bitcoin and crypto trading platform EndoTech, said in emailed comments.
“Heightened regulation is a matter of urgency and needs to be established immediately. For retail investors, who aren’t as well versed in risk as professional investment firms, they deserve trustworthy oversight, guidance and risk disclosure.”
