- FTX’s insolvency has massively affected the crypto industry.
- S&P 500 outperformed BTC in 2022.
- The unregulated crypto market nature has investor confidence shaken.
The crypto industry witnessed a shock as FTX, the world’s 3rd leading cryptocurrency exchange is bankrupt. Debates have been about FTX’s fall and its chief executive officer, once called the next billionaire Warren Buffett. However, this article touches on how the S&P 500 differs from cryptocurrencies.
Market volatility drew several investors in crypto. Moreover, the narrative of earning fortunes (quickly) saw some individuals mortgaging their homes to invest in BTC or betting their life savings into ‘shitcoins’ and alts.
Many have viewed stocks as a ‘boring’ space. Meanwhile, how else to hedge inflation besides Bitcoin when cash dies due to severe inflation? Bitcoin should have been immune to inflation due to scarcity.
But it Did Not
The crypto industry appears broken. Scammers capitalized on regulation absence, forcing firms such as FTX mistakenly lend out customer funds. Can we still trust crypto projects? That doesn’t imply that all are scams, but investment in a due diligence process and anyone researching may be scared of investing in virtual assets.
We could be staring at a colossal liquidation. No one comments on MicroStrategy’s BTC buys or Tesla’s BTC investment, but Bitcoin declines and how they might shock market participants. Moreover, did the collapse of the 3rd largest exchange impact financial markets? It resembles a non-event, confirming how small the overall sector is.
Buying stocks could be boring for investors interested in adrenaline investing. Nevertheless, assessing S&P 500 vs. Bitcoin this year shows the stock space, though down, outshined the crypto industry by a massive margin.
Moreover, anyone that bought Bitcoin five years ago lost 13%, whereas S&P 500 investors gained more than 40%. The ugly reality is retail investors should re-think their steps when dealing with cash and investments. Many have endured massive losses while trusting the new money. Nevertheless, they were in a bubble that busted after the pandemic.
What are your opinions about the above content? Do you prefer stocks or crypto? You can share your thoughts in the section below.