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The FTX tragedy left multiple coins on multiple markets in the dust as the exposure the exchange had and provided could not pass unnoticed by any major cryptocurrency project. However, the reactions and behavior of Ethereum on the market is something not everyone would have expected.
The nosedive the cryptocurrency market took between Nov. 7 and 9 was devastating, with most assets tanking by 20% , reaching multi-year lows. The same story is applicable for Bitcoin, which tanked below $16,000. Nevertheless, Ethereum's story is different.
In contrast to other assets, during the FTX sell-off on the market, the second biggest cryptocurrency has not hit a new low and even managed to gain some support prior to hitting the 2022 low of $880. For now, Ethereum is trading at $1,270, which technically makes it one of the most resilient digital assets during this week's market, and there are a few reasons for it.
The failure of one of the biggest centralized exchanges on the market might fuel another growth cycle for decentralized finance, including exchanges. Thanks to complete transparency and algorithmic-based management, DEXes will most likely avoid the fate of exchanges like FTX.
Apart from the growth of the industry beneficial to Ethereum, one of its biggest competitors, SOL, has been completely destroyed on the market, with millions of coins leaving the ecosystem. Since the beginning of the FTX crash, SOL has lost 44% of its value on the market.
Last, but not least: an increased burn rate. Thanks to the panic on the market, users have been actively moving their ETH and ERC tokens across different exchanges and wallets, causing a surge in network activity, hence the rise in the burning volume, making Ethereum completely deflationary.
Mushumir Butt
Yuri Molchan
Godfrey Benjamin
