In this episode of The Scoop, Frank Chaparro is joined by Larry Cermak Vice President of Research at The Block, and Loomdart, a founding member of crypto-native venture firm eGirl Capital to discuss FTX’s collapse and speculate on what comes next for the crypto industry.
Read our notes below to learn more.
Intro
Loom and Larry have lost a lot of money on FTX.
Loom says he will be okay and feels bad for his friends who have lost all their net worth and are in debt.
Larry knew FTX was in deep trouble when he saw the Binance acquisition of FTX news (which didn’t go through, FTX has filed for bankruptcy).
Better to write off the money on FTX as 0.
Why the jurisdiction of FTX’s bankruptcy matters
If the Bahamas could take over the FTX bankruptcy, it will be better for the creditors as dealing with the bankruptcy process will be much quicker than in the U.S.
FTX’s assets could be auctioned off quicker or a token could be released to settle a % of the user funds.
FTX International was registered & operated in the Bahamas.
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Who’s at Fault
VCs get into projects in seed/pre-sale rounds way before the product launches on the market and they’d take the investment as they have a good value proposition.
Grayscale’s $GBTC launch at a premium started the trend of raising more capital instead of growing the capital.
Even early Luna critics got in $LUNA looking at the pump, that is part of the problem.
What does this mean for CeFi?
Retail and institutions have gotten rekt by Centralized lenders.
DeFi products do not yet have on-ramps like centralized exchanges.
Loomdart’s tips for surviving bear markets
Bitcoin has a narrative during this time when currency markets are more volatile than ever.
Crypto is here to stay and those who stick around for the tech have a good chance of making good money in the next cycle.
Outlook for 2023
Things can always get worse, 2018 cycle did not have this much wreckage.
Liquidity drying up will make the markets boring.
A lot of Market Makers have got rekt on FTX and it is going to take time for the market to settle down.
ZK rollups are going to be huge. Polygon, Zksync, and Scroll will be launching ZK products next year.
Crypto Infrastructure being built will be really helpful for onboarding new users for the next cycle.
Check Out These Important Links
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Using a hardware wallet on the go is difficult and cumbersome - until now.
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Act now, click the link below and preorder the Ledger Stax.