Since the bankruptcy filing of FTX which was once valued at $32 billion and the collapse of the Terra/LUNA ecosystem, the cryptocurrency industry at large has suffered a series of negative cascading events which has affected confidence in the sector. As such, some traditional financial institutions have proactively reduced their exposure to cryptocurrencies in reaction to the negative events and are going for other alternatives.
However, in a Tweet by Binance CEO Changpeng Zhao (CZ) on January 27, he believes that the decisions taken by traditional organizations will do more harm than good in the near future.
Although the reluctance on the part of some of these traditional institutions will impact the rate of cryptocurrency adoption in the short term, CZ has predicted that this decision might prove costly for these players in the next one or two decades.
According to the Binance Chief, players who have now chosen to slow down on their crypto adoption strategy will be at the bottom of the log compared to their other peers as regards crypto adoption. CZ also added that their reluctance might affect their existence in the near future.
Unfortunate Events Shook Investors’ Confidence
Undoubtedly, some events in the crypto space including the collapse of platforms like Celsius, Terraform Labs, and ultimately FTX which is owned by industry poster boy Sam Bankman-Fried (SBF) battered investors’ confidence in the nascent industry.
While CZ and many other notable crypto entrepreneurs have condemned the actions of the embattled CEO and agreed this has taken the industry a few years back, the same has brought the sector under the intense scrutiny of regulators and this is probably a good thing for the industry. Consequently, many regulators are already making efforts to improve their crypto laws to better protect investors.
Recall that CZ in a conference in Indonesia last year publicly addressed concerns about the industry, noting that FTX’s collapse won’t be the last for the industry. The veteran also shared some red flags investors using cryptocurrency exchange platforms should look out for while they declare their proof of assets.