Bitcoin: What can be done to avert any future breakdowns in the world of digital currencies - Financial Times

The recent collapse of the Bitcoin world has wiped out over $Trillione from the value of transactions of this type of asset in the recent period, so how can any future breakdowns of Bitcoin be avoided

In the Financial Times, we read an article by Julian Tate on a previous decision by Colingen Irish to celebrate cryptocurrencies and the stars of this sector in the framework of an annual technology conference organized outdoors in the city of Toronto and attended by and interested in digital asset investors and industry experts.

But eight of the most prominent figures in the world of digital currencies, who were supposed to speak to 35,000 thousand participants in this big event, apologized for attending and justified it by family and health emergencies.

Instead of the open air sun, they entered a frost wave due to recent disasters in the digital asset markets. The cryptocurrency market has lost about 70 percent of the market value, and Bitcoin, the largest and most widely spread cryptocurrency in terms of transaction volume worldwide, has declined to levels below $20,000 per unit.

Cryptocurrencies such as Terra and Luna have also suffered a total collapse in the recent period with decisions that have raised serious concerns about the future of transactions of this type of asset, namely, the suspension of withdrawals by some cryptocurrency lenders, the most important of which are Babylon and Salzeus

The decision announced by Sam Pankman Fried, the 30-year-old billionaire and founder of FTX, the operator of the same-name cryptocurrency platform, to launch a financial rescue plan for a number of trading companies in this type of asset, a move that is very similar to what John Perbon Morgan did in 1907 when he saved other banks from bankruptcy during the U.S. financial crisis, has added to market concern.

This was sufficient to confirm the complete absence of a central entity that could be used to assist trading companies in cryptocurrencies during crises to which they might be exposed. The rapid decline in the volume of transactions of those assets also revealed serious concern that societies could rely on this type of currency.

Those concerns were clearly reflected in the Government's announcement in Singapore that it would take a firm stand with Bitcoin, and Singapore warned that the launching of its own cryptocurrencies by central banks could be a factor leading to the complete collapse of privately-launched cryptocurrencies.

Bitcoin declines the world's first digital currency by 14 percent

Despite all that, there are still people who bet that the future of cryptocurrencies, highlighted by the CEO of Binance Crypto in the United States Brian Schroeder who said, "Over the next few weeks, there may be more victims of cryptocurrencies, it's a natural consequence of the violent movements that the markets are currently experiencing."

"Amazon has come out of the womb of the websites bubble, and we want to be Amazon in our sector. This is my third time seeing (this kind of cryptocurrency breakdown). It's a good thing for the sector."

We spoke of the confidence shown in the Schroeder statements about some of the factors that would avert future disasters and collapses in the sector. The Binance Company, which it leads, for example, does not rely on margin trading or cryptocurrency lending, making it less vulnerable to loss. The company has also succeeded in raising capital by $200 billion recently and is likely to use it to diversify its investments, thus providing them with greater security.