FTX's Fall and the Future of Crypto Assets

Crypto's fall from grace or a lesson for long-term investors?

The recent bankruptcy of crypto exchange FTX has shone a new light on the fast-growing sector of digital assets. Bullishness about its future turned into pessimism over night. Regulators and investors have become all of a sudden more aware of the hidden risks that a burgeon market can pose. Does this episode mean the future of crypto assets is entirely compromised? The insights below have been handpicked to help you answer this question.

Video: Could FTX’s Bankruptcy Signal a Long Crypto Winter? (Wall Street Journal)

The failing of crypto exchange FTX has caused concerns regarding the viability of crypto assets. Investors are asking what does FTX's fall mean for the asset class going forward.

Crypto’s Contagious Effect on Equities (BNP Paribas AM)

Cryptocurrencies are appealing in part due to their diversification benefit. If this disappears, as seems to be happening across Asia, how should investors view these assets?

Defined Contribution Quarterly: Crypto Assets (Goldman Sachs AM)

For compliance reasons, this paper is only accessible in the United States

Crypto assets have captured the attention of many defined contribution industry stakeholders. However, the recent FTX debacle may cast a shadow over this part of the market.

Bitcoin a Revolutionary Technology or Passing Fad? (Mawer Investment Management)

Understanding Bitcoin may provide the key to understanding the underlying technology on which the cryptocurrency works – blockchain.

Crypto-assets and Risks for Financial Stability (ESMA)

The fast-growing crypto sector has attracted the attention of regulators. Policymakers are asking themselves whether the asset class can pose financial stability risks.

Responsible Advancement of U.S. Competitiveness in Digital Assets (U.S. DoC)

The Executive Order 14067 encourages the U.S. government to pursue exploration and development of the fast-growing digital assets universe.

Report on Digital Asset Financial Stability Risks and Regulation 2022 (FSOC)

The report finds that crypto assets can pose risks to the financial system if there are strong links between these assets and traditional financial institutions.

The Shadow Costs of Illiquidity (Journal of Financial and Quantitative Analysis)

Some crypto assets are highly illiquid. This may be appealing to some investors, but the cost of illiquidity may not always be transparent.