Note that there are divided views among cryptocurrency investors on the future situation of the coin industry. In particular, some of them compare what is happening in the market today to the 2018-2019 timeline and therefore predict no growth until at least mid-2023.

At the same time, another category of investors sees no point in comparing the current state of the cryptocurrency industry with the events of 3-4 years ago. Still, the opportunities in the coin industry are much wider now, which means it should attract significantly more users. Read more about possible market movements going forward here.

Cryptocurrency users

What will happen to the cryptocurrency market

According to CryptoPotato’s sources, what happened to FTX has led to a “domino effect”, that is, the gradual collapse of some companies associated with the exchange. Minerd expects that such entities may also declare bankruptcy in the future. Here is his rejoinder to that.

There is another gun that should go off – I cannot yet say what will be next. What is happening is like any other period when investors had easy money and plenty of opportunities to speculate. The weakest players get out first. Crypto has obviously had its own crazy trends.

Guggenheim Partners chairman Scott Minerd

The FTX bankruptcy had already caused serious problems for Genesis and BlockFi. Temasek, Multicoin Capital, Paradigm and CoinShares have also been closely tied to the exchange – all of which are now having significant difficulty staying afloat.

But as difficult as the crisis has been, Minerd is confident that the digital asset industry will be able to overcome it. This period somewhat reminds him of the famous dot-com bubble in the stock market in the late 1990s. He continues.

There will be an elimination game, just as with the dotcoms. The surviving crypto firms will remain – the digital asset sector is still in its early stages. Its future life will depend on the development of a new global regulatory scheme for the crypto market.

Bitcoin exchange rate over the past 30 days

In the context of Minerd’s words, it is worth noting the “impressive accuracy” of his previous predictions. For example, back in 2020, he predicted that the price of Bitcoin could rise as high as $400,000 in the near future. A few months later, Minerd said he expected the price of BTC to go up to $600,000. As we can see, both of these predictions failed miserably, and neither of them was even close to being realized.

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So far, owners of large quantities of BTC, also called “whales”, have been setting new records for bitcoin sales. According to analysts at the Glassnode platform, whales have sold more than 280,000 BTC in the past 30 days alone, which is a record for the history of the major cryptocurrency. The total supply of BTC in whales’ wallets now reaches $9 million.

The outflows of funds from whale wallets

This figure is divided into three categories of the richest investors:

• 1 to 10 thousand BTC: 3.6 million BTC;
• 10 to 100 thousand BTC: 1.9 million BTC;
• over 100 thousand BTC: 3.6 million BTC.

Aside from the whales, this year has been a particularly tough one for miners. Their business profitability has been plunged by a sustained fall in the price of Bitcoin, as the cryptocurrency’s value has fallen by almost 65 percent since the beginning of this year. The graph below clearly shows the dynamics of the profitability of mining per 1 exacheh of equipment capacity.

Mining yields per 1 exache of equipment

To support their operations, miners had to sell a significant portion of coins from their reserves. According to Glassnode, they have transferred more than 57 thousand BTC to exchanges since the beginning of this year.

Miners’ transfers to exchanges

At the same time, Bitcoin's hash rate remains quite high: this means that most of the ASIC miners connected to the socket are still working. This also puts miners in a much tougher position, because with a high hashrate, the complexity of mining remains high.

Bitcoin’s hash rate against the cryptocurrency’s price

Bitcoin mining complexity, meanwhile, has once again increased – this time by 3.27 per cent. The corresponding figure now stands at 35.36T, down quite a bit from the record 36.95T.

Bitcoin mining difficulty table

This means that mining BTC in cryptocurrency terms now brings in a record low amount in the context of a particular coin mining device. Well, with Bitcoin's small exchange rate, the situation gets even worse.

Is there light at the end of the tunnel? Only a noticeable wave of growth on Bitcoin and the cryptocurrency market as a whole can improve the situation for whales and miners. And that’s not so simple – so far the industry has been falling due to the crisis in the global economy and a possible recession in the US.

It looks like some cryptocurrency companies closely tied to FTX could indeed face serious problems. However, it is important to understand that even if some giants go bankrupt, their assets will not be instantly drained at the market rate. As events with Voyager, whose assets will be bought by the US subsidiary Binance, have shown, it is theoretically possible to solve the problems of large companies even within the industry itself. So the decentralised asset niche will clearly survive this phase, as Scott Minerd predicts.

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