Seasoned traders believe that the bankruptcy of one of the most prominent exchanges would reshape the crypto industry in the long run.
The second week of November ended on a bitter note for Bitcoin and other altcoins as the bankruptcy of a major crypto exchange led to fear and panic among investors. The total market capitalization of the crypto markets had dropped to $770 billion, after which it witnessed a sharp upsurge of around 16%. The market was mainly triggered by downtrends in Bitcoin and Ethereum.
Crypto exchanges also witnessed a surge in the withdrawal of BTC and other altcoins from their wallets. This indicated that investors had grown wary of exchanges and were storing their crypto assets in self-custody wallets. A tweet by Glassnode claimed that outflows had reached historic highs of 106K BTC every month, and the collapse of one of the biggest exchanges “will likely act to reshape the industry across many sectors and shift the dominance and preference for trustless vs. centrally issued assets,” said Glassnode.
BTC/USD price chart in 2022
Some experts also termed this to be a positive sign since investors were bullish on crypto as a long-term asset. The recent bankruptcy of the exchange would encourage investors to store their long-term crypto holdings in self-custody wallets and use exchanges only for large trades. Analysts claimed this to be a positive outcome for the long term.
Bitcoin is trading at around $16,400 on November 14, with BTC/USD down by 0.67% in the last 24 hours. Bitcoin is currently trading below its 20-day EMA (19,309.95), with other altcoins also witnessing steep declines.