CRYPTO CURRENCY the future of

In the beginning, crypto investors believed the currency would persist in the face of inflation, existing as its own parallel to a new “gold standard.” Crypto’s meteoric rise, however, proved to be its eventual downfall.

When the Fed raised interest rates in 2022 to combat inflation, crypto prices tanked. With them came the crypto market, bringing the world into what is now referred to as a “crypto winter,” a low-investment period for the currency.

Looking back, what investors speculate ended up being Crypto’s fatal flaw was the interconnectedness of the crypto market. Last July, a string of failures among select crypto firms and currencies, like terra and luna, revealed that when one link of the market failed, the others followed and the problem spread uncontrollably.

One casualty of this chain reaction was the fall of FTX, a crypto company valued at $32 billion. FTX owner Samuel Bankman-Fried was exposed for fraud in early November 2022 due to the mysterious disappearance of more than $8 billion in company investments. The fallout of this exposure caused the crypto market to lose billions.

Currencies like Ethrereum and Bitcoin hit an all-time low on Nov. 9, mere hours after the fall of FTX.

The global “crypto winter” has persisted into 2023, bringing into question whether the currency can survive.

Senior Asha Gudipaty recorded a podcast episode with Upper School economics teacher Kristen Blevins on the fall of FTX and its ripple effects. She said the company’s bankruptcy has ushered in a more hesitant period of crypto investing, but will not necessarily mark its end.

“Right now, everyone’s trying to recover if they have perhaps invested and lost money,” Gudipaty said. “But I do think that looking at cryptocurrencies that are even more established than FTX, there’s this mutual trust that’s not easily breakable, so a crypto spring is inevitable.”