Cyril Sabbagh: “The collateral damage of the FTX affair can be immense”

In this interview, Cyril Sabbagh discussed the following questions:

1-    How do you analyze the FTX downturn?

2-    The big losses of investors as a result

3-    Should we now expect an industry-wide crisis of confidence, and if so, how long can it last?

4-    Do you now fear a contagion effect?

5-    How are investors behaving in this troubled period?

As a start, he said that the FTX case came to sink the crypto market, but they were not all housed in the same boat. The SOL for its part lost more than 50% due to the very strong links between the Solana ecosystem and FTX/Alameda and their FTT token is now worth almost nothing.

He added that a lot of giant investors such as Sequoia, BlackRock or Visa have been taken in, which risks hurting the ecosystem and the image of cryptocurrencies. What happened highlights the financial embezzlement of Sam Bankman-Fried, the founder of FTX with reprehensible actions.

Regarding this industry, Cyril expected that a crisis of confidence will take place and it could be complicated to manage. Since everything is moving fast in the cryptocurrency world, the ecosystem will quickly learn from FTX’s mistakes, regulators and industry players will ensure that confidence quickly returns to the markets requiring more regulation and more transparency.

There are two scenarios: Either we are at the beginning and the collateral damage can be immense and the other scenario is that no other major players go out of business, in which case the low point may have already been hit in the market.

During this period, investors are very cautious, and they are likely to wait for things to settle down before returning to the market. At the same time, we are seeing a lot of fund transfers, with some obviously opting for platforms deemed to be safer.

Disclaimer

This article and the strategy it outlines, are provided for informational purposes only. The content within is not intended to be financial advice and should not be taken as such. The historical performance of Bitcoin ETFs is no guarantee of future results.

Investing in Bitcoin ETFs involves a high degree of risk, including the loss of all your investment, and may not be suitable for all investors. Market conditions can vary significantly, and the volatility of cryptocurrency markets can lead to rapid and substantial losses.

Readers are advised to conduct their own due diligence and consult with a professional financial advisor before making any investment decisions. The views and opinions expressed herein are those of the author and do not necessarily reflect the official policy or position of any financial institution or investment service.

Past performance is not indicative of future results. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation.

The author and publisher of this strategy are not responsible for any financial losses or gains you may experience. Investing in the markets is speculative; it should only be done with risk capital that if lost will not significantly affect your lifestyle.

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