Categories: Finance

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

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

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.

CK Zheng, former head of risk at large Swiss financial conglomerate Credit Suisse, said 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 crash. Terra ecosystems.

Zheng said he expected the process to pick up after the fall of Terra/Luna, but now he believes FTX will be the last big firm to be hit. 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 – 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 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.

Earlier, analytics company Chainalysis reported that the large influx from centralized to decentralized services was created by users and bots that used the FTX crisis to profit.

Source: Bits