By Farah Mourad, Senior Market Analyst of XTB MENA
Cryptocurrency markets continued to crumble as confidence deteriorated after the FTX debacle. The exchange lost billions in customer deposits in a matter of hours after doubts about the solidity of its finances surfaced and were reverberated by competitors and investors seemingly seeking to liquidate their positions.
The incident once again erodes confidence in crypto assets which are already under pressure from the tightening financial and economic conditions and the risk-off approach among investors during the last few months.
The increasing interest rates all over the world have shifted investors’ attention towards safer assets like bonds and treasuries which are becoming increasingly more appealing.
Inflation and the economic slowdown could also tie up disposable income and capital among individual investors which could have otherwise been invested in financial assets.
In this regard, cryptocurrencies could see more price corrections and additional pressures from investors and regulators as the need for strict regulation could become ever more important.
