In November 2022 cryptocurrencies were rocked by FTX collapsing. The whole crypto-blockchain ecosystem lost value as the price of the main coins plummeted.
Jehanzeb Awan, Chairman of the Middle East, Africa & Asia Crypto & Blockchain Association (MEAACBA) looks at the way the Bitcoin price has recovered in 2023 and what this means. He commented:
"We have just seen the best January for ten years in the short history of cryptocurrencies, with the value of Bitcoin increasing by 40%, but this comes following the 60% loss triggered by the collapse of FTX in November. For MEAACBA this highlights three important facts.
"Firstly, the cryptocurrency and blockchain ecosystem is still in its infancy, which is the main reason it remains volatile. Anyone who participates in the markets needs to understand the potential risks and doesn’t just look for rewards, so education is vital."
"Secondly, each time we have a downturn in the market we hear that this will be the death of the sector. However, these views don’t look at the depth of the blockchain ecosystem, from NFTs through to Web3. It is a complex and innovative technology which is resilient and starting to become part of everyone’s lives."
"Finally, crypto and blockchain has always been positioned as decentralised, with no one person or company in control or exerting influence over others. The collapse of FTX showed that this is no longer true. There are connections across the whole ecosystem and interconnections with traditional ‘centralised’ financial services."
"This shows us that we now need to move forward on regulations and provide fit-for-purpose guidance and protection for all market participants. The sector is exciting and dynamic and will present many opportunities especially in countries like the UAE which have the foresight to embrace the technology."
"In November last year market analysts were talking about the crypto-winter. This January we may have seen a bitcoin spring, but we all know that there are a lot of seasons crypto & blockchain has to go through."
