Let's learn from the consequences of the speculative investment practices that led to FTX's inflated value and its ultimate ruin.
The FTX collapse marks more than just the failure of another crypto exchange. It signals the time has come for the industry to grow up and embrace value. The value schism is here.
Bitcoin emerged at the start of the longest financial market bull run in history. The industry it spawned proliferated, literally, in the best of times. But all good things must end. Crypto is now facing the unhappy confluence of worsening macroeconomic conditions and regulators hungry for control.Traditional markets, meanwhile, are seeing the return of cautious, value-based investment. The reason is simple: When rates were at rock bottom, money was free. Now it’s not.
Crypto is in the midst of, in industry parlance, a “hard fork.” Those remaining once the FTX dust settles can choose to hunt for value that can be harvested and delivered to users, or they can persist with naked bets dependent on finding a “greater fool.”Some will stick with the latter path. Old habits die hard. But they will fall away as investors demand more. Meanwhile, we will see the rise of Web3 projects that drive real value by returning to basic commerce.
Ethereum is a proof-of-stake chain. While more centralized than Bitcoin, it is the beating heart of DeFi. With DeFi has come a tool to help assess value: total-value-locked calculations. Although they have their limits, the emergence of advanced financial gauges outside traditional institutions is of great interest. Clearly, traditional finance thinks so — hence the increased regulatory focus.
Many such data-handling projects are emerging, offering services such as identity tooling, cloud storage, and search and indexing. Their decentralized infrastructure means they are priced very competitively relative to centralized counterparts.
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