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After the fall of the FTX platform, cryptocurrencies in search of trust and regulation

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Could bitcoin be invulnerable? Declared dead 469 times, as the Bitcoin Obituaries site likes to calculate, it has recorded a 36% increase in value since the start of the year. An outbreak which is very far from erasing the vertiginous fall of 70% of which it was the object in 2022, or the succession of bankruptcies and unprecedented scandals which have marred the cryptocurrency sector over the past twelve months. In February 2022, Meta (ex-Facebook) buried its global private virtual currency project, libra, for good. In May, one of the most important currencies in the cryptosphere, terra-luna, collapsed, dragging down several decentralized finance players like Celsius.

But it was in November that the deathblow seemed to have been dealt, with the implosion of the FTX exchange platform: more than a million customers unable to recover their funds, bankruptcies again expected cascade, including that of Genesis, on January 19, and an unprecedented crisis of confidence. For the European Central Bank, things are clear: “Bitcoin is on its way to insignificance”write two of its leaders in a blog post at the end of November.

The multiple crises of 2022 seem to undermine the original promises of cryptocurrencies and the new financial world that its defenders held out. On paper, bitcoin is a payment network solely managed by its users, without the intervention of a central authority. No longer do you need a bank to send money to the other side of the world or make purchases on the Internet: it is the computer code that rules and it is the blockchain technology that guarantees that no stakeholder cannot take power. A decentralization which however seems very relative, if we judge by the very significant weight that the FTX platform had taken before collapsing.

“In the current state of practice, decentralization is a myth, says consultant Christian Pfister. In addition to trading platforms like FTX, there are many examples of centralization. » The validation of bitcoin transactions (mining) is thus increasingly concentrated among a few players, and even the most decentralized lending algorithms are in fact governed by a handful of insiders who enrich themselves in the process. Behind the machine, human greed has not disappeared in the crypto ecosystem: it has only changed its face.

Internet bubble and traditional crises

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