The cryptocurrency company FTX, owned by Sam Bankman Fried and following the footsteps of Celsius and Terra Luna, is the latest participant in the continuous narrative of the crypto catastrophe.
Although the other two disasters were important, this one is much more severe since FTX's crash snowballed, taking down other businesses.
The statements made by Laurence Fink (1) after FTX could shed light on the perspectives of institutional investors concerning the digital currency market. BlackRock is an American investment management organization, and Fink serves as the company's chairman and CEO.
In the not-too-distant future, according to the opinions of market analysts, crypto will have a considerable and widespread effect on the financial industry. And Fink agrees with this train of thought.
Emotions are running high today, which is feeding widespread selling. This selling has been reinforced by the decision of the US Federal Reserve to hike interest rates, not to mention the FTX disaster. Moreover, the US Federal Reserve's decision has fueled widespread selling.
Large financial institutions such as Blackrock are among the investors in FTX; these institutions are exploring the possibilities presented by the bitcoin market.
Fink made the revelation recently on stage at the New York Times Dealbook Summit (2). He is of the view that soon, a majority of the digital currency companies that are currently operating may not be around in the future.
The Pessimistic Predictions About Future of Crypto
On November 11, following SBF's resignation as CEO, FTX submitted its bankruptcy petition.
Since then, the market has been facing one or another breakdown, which has affected businesses such as Genesis and BlockFi. These businesses have either taken preventative measures to avoid bankruptcy or filed for bankruptcy themselves.
Clearly, this will have a detrimental effect on the companies that have already declared bankruptcy. Investors in FTX suffered a complete loss of value in the firm shares they owned. Kevin O'Leary (3) has, in the meantime, made a statement in which he urges the establishment of regulations in light of the disaster.
One may make the case that such statements coming from Fink can provide a useful glimpse into the perspectives of institutional investors about crypto businesses.
Have Institutions Lost Interest in Cryptos?
According to Tom Lee (4), head of research at Fundstrat, Bitcoin and other assets tied to it are still viable investments.
The adoption of blockchain technology by the cryptocurrency industry will still have an important role in finance, according to Mr. Fink, despite his concerns about possible unethical behavior in the FTX catastrophe.
Despite the problems reported with FTX, Fink believes that the technology is still extremely important. He continued by saying that he is convinced that "tokenization of securities" would usher in the next generation of markets and securities and that this is something he is looking forward to.
Fink Provides Some Very Valuable Insight
Even though Fink has a bearish outlook on the industry, the fact that established financial firms see value in cryptocurrency suggests that this perception is widespread.
However, as the cryptocurrency sector has clearly ignored the previous decade's lessons in financial management, confidence in cryptocurrency institutions is currently at an all-time low.
Fink shared the same sentiment, stating that this is a great opportunity to invest one's money. Considering what Tom Lee has stated, it's not hard to fathom the possibility of crypto being in existence for many years.
Meanwhile, Bitcoin is trading at $ 16,976, down -1% on a daily basis. Ethereum is exchanging hands at $ 1,273, down 1.65%. The Crypto market is valued at $ 810 Billion.