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SK Zheng, co-founder of cryptocurrency hedge fund ZX Squared Capital, believes institutional investors' interest in the cryptocurrency industry will not be shaken by the collapse of FTX.
Former Head of Risk at a LargeSwiss financial conglomerate Credit Suisse CK Zheng said that the fall of a major player like FTX should be the latest in a cycle of deleveraging in the market that began after the COVID-19 pandemic and accelerated even more after the collapse of the Terra ecosystem.
According to Zheng, he expected this processwill grow after the fall of Terra/Luna, but now he believes that the last large firm to be affected will be FTX. This is not to say that no other firm will suffer in the coming weeks and months, but there will be no more large drops like with FTX. Such events, Zheng believes, are natural in the context of a protracted and intense crypto winter that is decimating many weak cryptocurrency companies.
Nevertheless, Zheng also sees positive aspects - according toin his opinion, the collapse of FTX is unlikely to reduce the confidence of institutional investors in the industry. Especially those who invest in blockchain and only some digital currencies such as ether (ETH) and bitcoin (BTC). Many institutional players are looking to the future, thinking about how the blockchain will develop in the future and what place it will take in the financial system.
Formerly chainalysis analytics companyreported that a large influx from centralized services to decentralized ones was created by users and bots that used the FTX crisis for profit.