FTX Collapse Effect; One Time Crypto Fans Now Leaving the Industry

• One time fans leave the industry post FTX, Voyager Digital , Celsius and Terra’s fall.
• CryptoCompare revealed that crypto investors have withdrawn almost $20 billion in November.
• The massive withdrawal has lowered the fund managers’ collective AUM in two years.

The FTX collapse had a dire effect on the crypto industry and crypto fans alike, as many one-time fans are now leaving the industry.

The year has been the toughest for the crypto industry as a whole. The bankruptcy of Voyager Digital and Celsius Network, and the dramatic collapse of Terra Luna sent shock waves amongst the crypto community. The final straw for one-time crypto fans was the collapse of FTX, one of the leading crypto exchanges.

All these events culminated in the worst ways possible. The result is Bitcoin falling 75% from its highest price last year.

A recent report by research firm CryptoCompare shows that crypto investors withdrew almost $20 billion in November, or about 15% of total assets under Crypto fund asset managers. The massive withdrawal has drastically lowered the fund managers’ collective assets under management (AUM) in two years.

Some crypto investors have even blamed the ‘absence of regulations’ for the mess.

Crypto saw a surge in prices and popularity post-pandemic. Bitcoin spiked from $9,000 in March 2020 to around $68,000 at its all-time high in November 2021, when many people tried investing in crypto for the first time.

JPMorgan Chase revealed that the share of U.S. households that have ever transferred funds into a crypto-related account went from 3% before 2020 to 13% as of June 2022.

Meanwhile, crypto traders are still ‘hodling’ cryptos or purchasing the dip either because they do not need the money soon or because they believe in the promised financial revolution by the crypto industry earlier on.