A Citi analyst has warned of a serious risk of broader contagion to the crypto ecosystem. FTX cryptocurrency
A Citi analyst has warned of a serious risk of broader contagion to the crypto ecosystem stemming from the collapse of crypto exchange FTX, noting that the contagion “can last for a significant amount of time.” He added that the crypto industry seems to have “no significant lender of last resort.”Citi analyst Joseph Ayoub explained in an interview with CNBC Friday that the overall cryptocurrency market faces risks of contagion from the implosion of FTX.
Ayoub further predicted that companies in the crypto sector will face renewed skepticism and trust issues, but noted that it also means other firms can move to capture more market share now that one of the biggest players has gone under. Contagion can last for a significant amount of time, and with the amount of companies that are involved and the amount of investments involved with FTX, and following Chapter 11, it could take a long time for this to resolve.Changpeng Zhao , the Citi analyst believes that the FTX crash differs from the 2008 financial crisis when the government stepped in with a massive cash injection and bailed out Wall Street.
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