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The Survival of Trading Platforms in the Bear Market

One of the most overwhelming feelings in the human being is the uncertainty of not knowing what could happen in the short or medium term; this emotion has been transferred to the digital financial market and the platforms that make it up. The above-mentioned tips will help you find the best crypto exchange such as the official Immediate Bitcoin site is chosen by many seasoned crypto investors as a better platform for crypto trading.

During this year, we have seen not only the price of cryptocurrencies fall but also some of them have entirely disappeared, as was the case of Terra/Luna, an issue that undoubtedly left more than one investor decapitalized.

It has not been all; many exchange platforms considered leaders in the crypto assets market have been falling steadily and significantly, some larger than others, which unfortunately did not execute a timely risk plan in a crypto winter scenario.

The disproportionate increase that digital currencies had during the year 2021 undoubtedly caused an effect of attracting investors and users who did not hesitate to use their funds to obtain substantial rates of return.

Nobody expected a scenario of geopolitical conflict, an inflationary crisis that mainly attacks two world powers (the United States and Europe), coupled with the measures taken by the Fed to counteract the economic and financial effects.

FTX could not be traded

The supposed announcement of a transition of platforms where FTX would be traded to Binance, rescuing in a certain way the users of the exchange platform at risk of collapse, was dismissed by the owners of Binance.

These negotiations usually put the digital financial market in a tense calm, subsequently developing a domino effect on digital assets.

Due to the complex financial situation that FTX is going through, it represents a relatively high risk for Binance to try to recover the irregularities that FTX has incurred due to excessive money management, where withdrawals by users undoubtedly leave a Huge hole in the finances of the crypto exchange platform.

Relentless regulatory crackdowns have caused a siege around cryptocurrency platforms. Companies like Celsius and Three Arrows Capital were the main ones to hit the reputation of digital currencies as digital investment instruments.

SEC’s follow-up on FTX strengthened Binance’s decision to acquire said Exchange. However, for more intentions of providing liquidity to the platform and its users, it is a very high risk that is run, a situation that escapes the hands of any corporate investor.

One the figures that are handled, according to Sam Bankman-Fried himself, owner of FTX, there is a deficit that exceeds 8 billion dollars, an amount that could make it disappear as a cryptocurrency exchange.

Any misuse of funds corresponding to users can trigger an expulsion effect by the free market; everything is in the hands of the owner of FTX in the search for alternatives that allow the platform not to disappear.

Exchange platforms that disappeared in 2022

Possibly this is the year with the most significant number of losses in the cryptocurrency market due to the resounding fall of the digital financial need and, therefore, of all the elements that make it up, assuming its users as the primary victims.

Most of the cases of exchange platforms that have been declared bankrupt leave many users without their funds due to poor capital risk management and not following guidelines regarding the management of available resources in a downtrend scenario.

Unwittingly, all these events have been undermining the reputation of the digital asset market; however, digital currencies have been in a constant struggle to establish a support level that allows them to give their investors a break and develop a change in trend there.

The alarms have remained active in the cryptocurrency market; even Coinbase has made decisions from reducing its payroll to considering risk levels that could have led to bankruptcy. Nevertheless, it remains in the expectant market.

Although the Exchange Celsius, Three Arrows Capital, and Vauld did not have the same fate today, they were declared bankrupt after the fall of the digital market in this crypto winter.

This situation has been compared to that which occurred in 2008 during the world crisis and represented the largest bankruptcy in the history of the United States and was that of Lehman Brothers.

Conclusion

It has been a compendium of events that have triggered severe consequences for the cryptocurrency market. That is when the exchange platforms representing the head of crypto exchanges collapse.

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