FTX Files For Chapter 11 Bankruptcy Protection: The Crypto GFC is Coming

I hate to be all doom and gloom, but FTX has just announced they're filing for chapter 11 Bankruptcy Protection. And chief executive Sam Bank man-Fried has stepped down (not that he had a choice).

I actually predicted this in my post from a few days ago that if Binance walked away from the FTX deal (which they did) as I suspected CZ and Binance found something during due diligence that broke the deal or they were never serious in the first place, that Bitcoin would tumble and tumble it has.

What makes the mess even messier is in the bankruptcy filing, a further 130 associated businesses in the sprawling FTX web were disclosed. FTX has more than 100,000 creditors, assets between $10bn to $50bn as well as liabilities between $10bn and $50bn.

Thr cookie-cutter press release doesn't tell us anything new or substantial (as expected):

https://twitter.com/FTX_Official/status/1591071832823959552?t=P-mfTZPL0cJVeH_jbj5Rpg&s=19

We are not talking about small amounts here, kids. We're talking billions in liabilities. Imagine being responsible for navigating through a mess like this? Given FTX were one of the top five crypto exchanges by volume, it's a huge deal for the crypto market.

The funniest thing of all about this situation is Bloomberg terminals were reporting Bankman-Fried’s wealth as down 100% from $16.2bn earlier this year, to a current estimated net worth of $3. Lol.

Losing all of your personal wealth in such a short period of time. Feels bad man.

In June, FTX have BlockFi a $250m loan because it fell into trouble as well. We've seen a lot of failing DeFi projects over the past year with more to come. There are a couple of FTX associated DeFi projects that FTX bailed out that will be most likely going down soon enough because of this.

As expected, Bitcoin is in the proverbial toilet.

I posted about this not too long ago where I say Bitcoin will fall to $12k, possibly lower. Well, as expected, we're going there. We might see a couple of fake rallies over the next few weeks, but the only people that will profit are whales setting up the traps.

It's tempting to buy back in when you see Bitcoin rally 5%, but there is no reason for it to go up. Keep a level head and remove emotion from the equation. You'll make better financial decisions if you take a more logical approach to trading.

This whole FTX situation is going to continue to get worse. If you think that FTX is the only large-scale crypto exchange or project on the edge of financial catastrophe, then you're in for a heck of a surprise when the dominoes begin to fall.

It's hard to argue the future of finance is crypto when DeFi platforms keep getting into financial strife, exploits, scams, and the mismanagement of funds. Traditional banks aren't much better than we saw in 2008, but at least consumers are protected with government-backed guaranteed deposit schemes.

How is crypto any better? If anything, it's riskier with all of the financial problems we've seen. Sure, fundamentally, crypto is better, but do the downsides outweigh the upsides? It's clear we need regulation for crypto to take the next step in adoption.

I know people DCA'ing right now and if you can afford it, then more power to you. But I will not be buying any more crypto for the moment exception of Hive. Even then, I'm not making big stupid buys because we're not at the bottom yet.

Hive is the only crypto I believe in at present, but even a good product isn't immune to the market effects of Bitcoin.