According to Hoskinson, incidents similar to the FTX situation are getting complex, considering that they have ripple effects on other ecosystem players, but he noted that the cycle might be coming to an end, he said during a webcast on November 9. Hoskinson added that the implication of FTX collapse would likely mirror market events that followed the Terra (LUNA) ecosystem crash that resulted in cascading effects on companies like Celsius Network and Three Arrows Capital.
Impact of 2021 excesses
Although details behind FTX’s insolvency remain scanty, Hoskinson stated that the collapse is an impact of the general crypto markets ‘excesses’ of 2021. Furthermore, Hoskinson suggested that the proposed purchase of FTX by Binance is not a silver bullet, noting that much work is needed. At the same time, he acknowledged following the drama, the high-profile event will likely attract new scrutiny and a regulatory push.
Market volatility
Notably, the collapse of FTX has resulted in sharp market volatility, with a Finbold report indicating that the sector wiped out over $100 billion in 24 hours, with assets like Bitcoin (BTC) correcting below $20,000. In this line, Hoskinson suggested that if the Binance acquisition of FTX goes through, the market might stabilize again. In general, Hoskinson pointed out that the crash is negative for the cryptocurrency market, noting that investors and regulators will not isolate the incident for FTX alone but for the general digital asset space. However, he expressed optimism that the market will likely recover, considering the underlying technology and projects in development. Watch full video below:
