ZX Squared Capital co-founder: "FTX will be the last major company to fail in this cycle"

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SK Zheng, co-founder of cryptocurrency hedge fund ZX Squared Capital, believes that the interest of institutional investors in the cryptocurrency industry will not be shaken by the collapse of FTX.

Former head of risk department of a largeSwiss financial conglomerate Credit Suisse CK Zheng said that the fall of such a large player as FTX should be the last in a cycle of deleveraging in the market, which began after the COVID-19 pandemic and accelerated further after the collapse of the Terra ecosystem.

According to Zheng, he expected that this processwill grow after the fall of Terra/Luna, but he now believes that the last major firm to suffer will be FTX. This does not mean that no firm will suffer again in the coming weeks and months, but there will no longer be the same large falls as with FTX. Such events, Zheng believes, are natural in the conditions of a protracted and intense crypto winter, which is mowing down many weak cryptocurrency companies.

However, Zheng also sees positive aspects -in 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 certain digital currencies such as Ether (ETH) and Bitcoin (BTC). Many institutional players are forward-looking, thinking about how blockchain will develop in the future and what place it will occupy in the financial system.

Formerly analytics company Chainalysisreported that the large influx from centralized to decentralized services was created by users and bots who exploited the FTX crisis to profit.