“Cutting out weak actors or inappropriate actors, while causing volatility and admittedly stress, is ultimately a healthy thing,” said Andrew J. Spellar, chief investment officer of Fairfax County Employees’ Retirement System, worth $4.5 billion, in an email.
And Ajit Singh, CIO of the $5.3 billion Houston Firefighters Relief and Retirement Fund, points out that the world of crypto investing has survived and even thrived in the aftermath. similar collapses resulting from scandals and mismanagement.
“The current FTX fiasco is already seen because in 2014, the largest crypto exchange, Mt. Gox, failed with billions of bitcoins missing,” Singh said in an email. “Within a few hours, bitcoin fell 23% to $418. It has since rebounded considerably, even with all that price volatility.”
“We believe something good will come out of this, as better regulations will protect consumers and increase adoption,” he added.
However, not all investors currently share MM’s optimism. Spellar and Singh.
During the week ended November 13, FTX issues fueled a spike in outflows on global crypto exchanges. According to Bloomberg, users withdrew $3.7 billion net worth of bitcoins and $2.5 billion worth of ether from these exchanges. They have withdrawn over $2 billion from many of the biggest stablecoins over the same period.
Over the past 10 days, bitcoin’s price has fallen from $21,400 on Nov. 5 — shortly before FTX’s troubles became known to investment markets — to $16,648 as of noon EST Thursday, a decrease of 22%. Other crypto-related investments, such as the crypto token, ether and the actively managed ETF Amplify Transformational Data Sharing, which invests in companies in the blockchain and cryptocurrency sectors, fell sharply to the aftermath of FTX’s collapse, adding to past declines. year.