- The crypto winter is now being harsh day by day.
- It was started by the downfall of Terra, an open-source blockchain protocol that underpins algorithmic stablecoins.
- According to Sam Bankman-Fried, the former CEO of FTX, the virtual coins were unfeasible to value as they produce no cash flow.
The latest collapse of FTX has added more to it. The total market capitalization of cryptocurrencies is down over $2 trillion. In line with the CoinMarketCap, it is 70% low than its peak.
While many are still bullish regarding cryptocurrencies, they believe it must go back to its roots. However, holding bitcoin or other tokens like that in offline digital wallets, is associated with risks. Somehow, if the possessor loses their encryption key or gives coins to the wrong address, then they have no option.
Also, cryptocurrencies are extremely unstable to use as money. To limit the instability, crypto enthusiasts introduced stablecoins. However, Terra’s downfall shows that stablecoins aren’t like their name.
According to Sam Bankman-Fried, the former CEO of FTX, the virtual coins were unfeasible to value as they produce no cash flow. He also highlighted the unsuitably slow speed of transactions on the Ethereum network. Compared to this, Bitcoin is much better.
From Bitcoin to FTX
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