On Monday, the cryptocurrency world woke up with a hangover worthy of your best college night aftermath. In one week, FTX went from the second exchange platform in the sector globally to a company placed in bankruptcy in the United States. A little earlier, at the beginning of November, the media disclosed that the FTX Alameda Research fund was investing in crypto-assets issued by… FTX, in an arrangement as risky as it was fragile. And the final nail in the coffin on Saturday, when company officials revealed that unauthorized transactions had taken place that could result in the disappearance of hundreds of millions of dollars.
It now remains to be seen whether this great plunge is an isolated case or the harbinger of a storm in the world of cryptocurrency, like Lehman Brothers with traditional banks fifteen years ago?
FTX, the non-trust contract
The worst-case scenario cannot be ruled out, warns Geneviève Bouché, cybernetician futurologist at Paris-Dauphine University: “Money is backed by a mechanism of trust, and once it is damaged, panic can quickly spread. . Hugo Estecahandy, crypto specialist at the French Institute of Geopolitics, evokes a snowball effect: the more the value of virtual currency drops, the more people panic and sell, the more the value drops, and so on. without really knowing how far it will stop.
Cryptocurrencies have the particularity of having even fewer safeguards than physical money. Anne-Claire Bennevault, director of bnv.com, a brand and business performance consulting firm, and of spak.fr, whose goal is to democratize access to economic research, explains: “The low level of management and regulation in this market amplifies the risks of a rebound effect. The spread is a more than plausible scenario.” Same observation with Geneviève Bouché, for whom cryptos will have a hard time reassuring after this gigantic hiccup: “It looks like the end of a utopia, we were promised to remake the world thanks to digital by doing without banks, but people notice that without authority, without safeguards, the situation can quickly spiral out of control. It’s a model that goes into the straws “
Exposed weaknesses
So beware: the bankruptcy of FTX is not due to a structural problem with cryptocurrencies, but to a cataclysmic management. We are talking about $477 million that have been stolen and another 186 million that have been transferred to secure storage by FTX itself, according to the cryptocurrency analysis firm Elliptic. But the simple fact of having been able to establish such an assembly before being pinned “shows investors, large companies or individuals, the danger of using its exchange platforms, which represent three quarters of bitcoin transactions” , develops Hugo Estecahandy. These platforms are indeed very popular as they facilitate and democratize cryptocurrency, not requiring any particular notion of encryption.
The expert continues: “People can clearly see that they no longer have control or possession of their cryptos”. Which, admittedly, isn’t the most reassuring sign of confidence in the world. So if there’s nothing to say that another platform would have made such catastrophic – and illegal – choices, there’s no guarantee that they wouldn’t either. As a result of these exposed weaknesses, many withdrawals or panic selling of crypto have already taken place, notes the specialist.
And now ?
So, as with every crisis, the hope of better days and of a “next world” is never far away. “This can lead to better regulation of this sector, which many platforms are calling for, even more after these events, believes Anne-Claire Bennevault. For example, we will have to demand a deposit guarantee ”. Singing tomorrows or not, future there will be, predicts the expert, who recalls the strong appetite of young people for this new world: “The under 35s are as interested in cryptocurrencies as in life insurance or shares in stock market. It is a speculative, risky sector, which lacks barriers, but it continues to make people dream. »
The cryptocurrency will therefore undoubtedly experience difficult times, but FTX will not have dragged it to the grave for all that. After a post-college-night hangover, the next drink was never far away.