Bitcoin Policy Research Center Co-Founder: FTX Bankruptcy Strengthens Bitcoin Confidence
In the wake of the FTX exchange's collapse, the cryptocurrency industry has taken a hit. However, David Zell, co-founder of the Bitcoin Policy Research Center, believes that this unfortunate event will ultimately boost confidence in Bitcoin. In a recent appearance on the television show "Just the News, No Noise," Zell explained why he thinks the FTX bankruptcy will have a positive impact on the acceptance of Bitcoin in the long term.
Participants in the crypto space should remember one thing: not your keys, not your assets. People who lost money on FTX could not comply with this golden rule. Therefore, an important advice that can be given to owners of crypto assets is: withdraw funds from centralized exchanges and store them yourself..said the head of Bitcoin Policy
Increased Level of Bitcoin Acceptance
Zell argued that despite the sensational situation with FTX, many people still believe in Bitcoin. The cryptocurrency's value lies in the fact that it allows people to store Bitcoin on their own, without the need for counterparties. Therefore, storing digital assets on exchanges acting as third parties goes against the very concept of cryptocurrencies. Zell suggested that the main reason for FTX's failure was the lack of demand for the FTT token. According to Zell, FTX created its own cryptocurrency and used a trading firm closely associated with it to artificially inflate the FTT rate. Then, they used it as collateral for a loan of a large amount of funds. However, with few buyers, this led to the bankruptcy of the exchange, which acted as a "perpetual motion machine."
Not Your Keys, Not Your Assets
Zell emphasized the importance of people controlling their own crypto assets, noting that the FTX situation highlights the need to follow the golden rule: "not your keys, not your assets." People who lost money on FTX failed to follow this rule. Therefore, an important piece of advice that can be given to crypto asset owners is to withdraw funds from centralized exchanges and store them securely themselves.
Massive Withdrawal of Assets
It was previously reported that the FTX bankruptcy led to a panic among crypto investors, resulting in a massive withdrawal of assets from centralized sites. Despite this setback, Zell is confident that Bitcoin's ability to operate independently and securely will only strengthen over time. He believes that the failure of FTX, though regrettable, will ultimately lead to greater acceptance of Bitcoin and other decentralized cryptocurrencies.
While the collapse of the FTX exchange may have had a negative impact on the cryptocurrency industry, David Zell believes that it will ultimately strengthen confidence in Bitcoin. The ability to store digital assets without relying on third parties is a key advantage of cryptocurrencies, and the failure of FTX serves as a reminder of the importance of the golden rule: not your keys, not your assets. By following this rule, crypto asset owners can ensure that their funds remain secure, even in the event of an exchange collapse.