First Narrative in Crypto - Credibility
If you are going to run a crypto project, what will be your priority in your services? Would you focus on higher return promises or credibility? A remarkable week has passed in the crypto ecosystem. The FTX team's failed operations have resulted in the loss of millions of dollars and the "melted" of the second-largest cryptocurrency exchange in front of everyone's eyes. To begin with, they kept cash inside the stage, then, at that point, they got hacked 😶
Despite the fact that we all live by the adage "Keep your assets in your cold wallet because not your keys;" We have been deceived once again, not by your money**. It doesn't matter how big a crypto service provider is—losing millions of dollars in a matter of seconds is always false advertising.
Crypto is Driven by Feelings
We ought to concede the way that crypto is a close-to-home market that straightforwardly responds to both positive and negative events. It could be related to the Risk/Reward ratio and its 7/24 openness, which cause people to be more sensitive to anything that happens.
The majority of the time, the whales feed their greed by dumping their wealth on those who have been overhyped. However, during a bear market, disbelief and fear take over. The Centralized Exchanges, in my opinion, have learned from the demise of FTX and the erosion of Crypto.com's credibility. These well-known crypto projects are in serious trouble.
The previous one has been eliminated; the second one tries to get better. It's difficult for crypto ventures to deal with a developing FUD around themselves yet the FUD can undoubtedly gobble up the entire piece of the pie that they have.
Mild Regulations for Credible CEXs
I believe that the recent cases of BlockFi, FTX, and a large number of other zombie cryptocurrency projects demonstrated that centralized exchanges do not at all protect customers! The miserable truth is recognized in a hard manner. Since keeping one's money in an exchange for even a day is like gambling, people started to feel more positive about regulations.
Crypto service providers that hold 1:1 crypto assets in their wallets and those that will keep sufficient reserves in the banks as partial insurance of customer funds are likely to see a Level 1 regulation.
As time goes on, we might be able to see how every project conforms to regulations in order to appear "credible." As soon as all crypto projects are identified and/or categorized by regulators, I believe 2022 will mark the end of the wild crypto era.
According to Yadav, who was quoted in The Washington Post,
FTX's demise means not only a kind of normal chaos for the industry but also a lot of worries about the credibility of the industry and its ability to actually run itself.
Killing crypto does not contribute to any parties, but when it is regulated, it will be another I believe that more CEXs will encounter difficulties as we work toward this objective.
What is your stance on these points?
I believe credibility and transparency are two pillars of a long lasting crypto services.