Arthur Hayes says FTX is now beyond savings

Former BitMEX CEO Arthur Hayes believes that FTX is finally heading towards bankruptcy now that Binance has refused to bail out the company.

The exchange’s co-founder presented his analysis of the future of FTX on Thursday and offered some predictions about how the crisis will affect the market.

FTX will go bankrupt

in Twitter theme On Wednesday, Hayes claimed that no player is big enough to buy FTX, if the CEO of Binance richest man In coding – he was reluctant to do so.

Binance signed a non-binding letter of intent with FTX on Monday, agreeing to buy FTX and help it during the “liquidity crisis.” But the company almost immediately got back from the deal following an alleged government investigation into FTX and a review of FTX’s handling of customer deposits.

Around the same time, a Wall Street Journal report came that FTX CEO Sam Bankman-Fred told investors that the exchange owed depositors $8 billion. Given the scale of the situation, Hayes doesn’t like the prospects of customers getting their money back anytime soon.

He predicted that “FTX customer deposits will only be recovered in bankruptcy court, and it will take many years to settle them.” “Mt Gox creditors are still not paid and nearly a decade has passed.”

Mt Gox is a former Bitcoin exchange that went bankrupt in 2013 after losing hundreds of thousands of Bitcoin to depositors. To this day, creditor payments are still being made in Bitcoin and Bitcoin Cash Investigation.

Hayes believes that the exchanges will start protecting their clients’ assets more carefully from now on. In fact, several exchanges have already announced plans to implement Proof of Reserve systems, including Binance.

However, in the near term, Hayes expects trading firms exposed to FTX to take the lead in the number of trading venues they do business with. “The liquidity of the order book will decrease,” he said.

Where is the market headed?

Bitcoin hit its lowest price in 2022 in the wake of the FTX fallout, dropping below $16,000 on Wednesday.

In contrast, crypto markets get well slightly on Thursday after the October CPI reading showed a decline in inflation levels, indicating that the Fed may be a step closer to slowing rate hikes.

However, Hayes expects markets to “vomit” less as the contagion from the FTX bankruptcy spreads across the industry. He warned all investors who have money invested in companies that the company may withdraw their assets immediately.

“I’ve been trading cryptocurrency for longer than I’ve been trading with TradFi, and I’m still speechless about what’s going on,” he concluded.

Data on the series on Thursday specific That FTX may have resumed processing withdrawals after being paused on Tuesday.

Arthur Hayes’ post saying that FTX is now post-save first appeared on CryptoPotato.

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