coinbase In a research report released Tuesday, cryptocurrency stock market FTXHe said that the collapse of .
Coinbase: FTX’s Collapse Will Possibly Lead to an Extended Crypto Winter
The exchange said that the weak liquidity in the cryptocurrency markets could last until at least the end of the year and the crypto winter until the end of 2023.
analysts David Duong and Brian Cubelliswrote that the new turbulence in the cryptocurrency market and the lack of large buyers left the industry vulnerable, potentially prolonging the already long crypto winter.
The report said that FTX bankruptcy proceedings will be watched closely, but for the digital assets sector, much depends on the course of interest rates in the US.
Coinbase noted that the weak liquidity could last at least until the end of the year, noting that stablecoin dominance has increased to a very high 18% of the total crypto market cap.
He noted that this fell from about $1 trillion at the end of last month to about $800 billion as of November 12.
Stablecoins are a type of cryptocurrency whose value is pegged to another asset such as the US dollar or gold.
The combination of rising energy costs and weak Bitcoin prices has led to increasingly stressful economic conditions for Bitcoin miners, the report said.
As a result, the Coinbase report said that the collapse of FTX has undoubtedly damaged investor confidence in the industry, and this will take some time to rectify and extend the crypto winter for a few more months, perhaps until the end of 2023.
*Not investment advice.
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