Bitcoin (BTC) will recover from the FTX “black swan event” just like other setbacks, Stockmoney Lizards trading team believes.
In a Tweeter on November 12, the popular commentator argued that the events of the week were actually nothing new for Bitcoin.
FTX “a real black swan event”
Despite falling 25% in a matter of days, BTC/USD is not doomed due to insolvencies affecting FTX, Alameda Research, and possibly other major crypto firms.
For Stockmoney Lizards, the collapse, although sudden, is not much different from the liquidity crises of Bitcoin’s early history.
“We indeed witnessed a real black swan event, the bankruptcy of FTX,” he said.
“BTC’s history is littered with such events and the market will recover from them as in the past.”
An accompanying chart pointed to similar “black swan” moments from the past, dating back to the 2014 Mt. Gox hack.
Two other notable events were the Bitfinex exchange hack in 2016 and the COVID-19 cross-market crash of March 2020.
As Cointelegraph reported, former FTX executive Zane Tackett even offered to copy Bitfinex’s cash recovery plan from its $70 million loss by creating a token. FTX then filed for Chapter 11 bankruptcy in the United States.
Reactions included candid assessments of the crypto industry, with Filbfilb, co-founder of trading suite Decentrader, predicting a multi-year recovery process.
Changpeng Zhao, CEO of Binance, which at one point planned to buy FTX, warned that the industry had “been in the dark for a few years.”
BT’s swap reserves near five-year low
Meanwhile, the loss of user confidence is already manifesting itself in declining exchange balances.
Related: Losing Hodlers Sit on 50% BTC Supply After Bitcoin Price Drops $5.7K
According to data from on-chain analytics platform CryptoQuant, the BTC balance of major exchanges is now at its lowest since February 2018.
Platforms tracked by CryptoQuant ended November 9 and 10 down 35,000 and 26,000 BTC, respectively. Both days were multi-month highs, but not surpassing the one-day tally of June 17 – 67,600 BTC.
FX outflows continue to be watched by industry analysts, among them CryptoQuant Contributor, Maartunn.
More broadly, voices have called on social media users to withdraw funds from custodial wallets.
“Bitcoin exchanges are run by people who have learned fiat finance,” said Saifedean Ammous, author of the popular book “The Bitcoin Standard.” wrote in part of a Twitter post.
“Playing with depositors’ money is normal and healthy for them, because in the fiat system, the central bank destroys money to bail them out whenever it goes wrong.”
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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