Period: 7^th November 2022– 14^th November 2022

· There is a saying in the Chinese crypto scene, “one day in crypto equals one year in the real world”. In the crypto industry, things can be escalated in the blink of an eye. Last week, we all witnessed how quickly the world’s second-largest crypto exchange collapsed.

· The fallen of the FTX empire caused aftershocks to the NFT market. While Ethereum-based NFT projects are still half alive, the price, volume and liquidity in other blockchains have dried up. Despite getting caught in the wind, a 3D-anime PFP NFT project managed to clock decent sales in such a chaotic week.

Who would have thought the second-largest crypto exchange in the world would collapse in the blink of an eye? It all started with a question brought up by one of the reputable news media outlets, Coindesk, after which it reviewed Alameda’s balance sheet according to a private financial document. CZ, CEO of Binance, announced his decision to offload FTX’s exchange token (FTT), a decision that caused the death spiral of FTT, the bankruptcy of FTX and the disappearance of Sam Bankman-Fried (SBF), founder and CEO of FTX. Almost nothing in the financial world – the CPI data, interest rates, macroeconomics – has anything to do to help clean up the mess in the crypto world. Retailers who have their funds stuck in FTX are in total loss; retailers who have nothing in FTX are pulling out their investments either in fiat or stablecoins; institutional investors lost money and interest in the crypto industry while countless venture capitals have yet to disclose their losses in this disaster. Apparently, funds in crypto are flowing out and bitcoin, the largest market cap of all cryptos, saw a 22% weekly drop with no sign of stoppage.

Coinlive covered the FTX’s fiasco from the very first day; check them out at the end of this piece if you missed out. Long story short, FTX declared bankrupt and shortly after the announcement, SBF was nowhere to be found. With Celsius and 3AC as the precedent, the FTX case again alerts all crypto investors to the risk of putting their assets in centralised entities. As CZ once said in 2020, “the days of centralised exchanges are numbered”. Although running the biggest centralised exchange himself, he suggests crypto users start using decentralised crypto wallets and specifically singled out Trust Wallet, the wallet company which Binance acquired in 2018. Trust Wallet is a non-custodial wallet software for digital assets such as cryptocurrencies, virtual commodities and NFTs that allows users complete control over their assets. Unlike Metamask, another popular non-custodial crypto wallet that supports only Ethereum-based tokens, Trust Wallet supports multiple main blockchains such as Solana (SOL), TRON (TRX), Tezos (XTZ), etc. Thanks to CZ’s special shoutout, the Trust Wallet Token (TWT) price increased a whopping 58% to $1.87 overnight.

As one of the components of the crypto ecosystem, the NFT market is unavoidably affected. Ethereum is always the leading blockchain in the NFT market, with Solana (SOL) and Cardano (ADA) taking second and third spots. Ethereum and Cardano saw a massive reduction of nearly 40% in trading volume, while Solana was still holding up. Despite the trading in Solana being as active as it seemed, the fiat value of its blue chips suffered a heavy loss. For instance, DeGods, with a floor price of 200 SOL, was worth roughly ~$6k a week ago compared to ~$2.6k as of the time of writing. SOL price was heavily affected by the collapse of FTX; it was down 60% in a week. This can pretty much sum up why trading volume in Solana NFT doesn’t drop as much; NFT collectors can now afford a blue chip collection in the Solana blockchain.

While the NFT price, volume and liquidity in other blockchains have dried up, Ethereum-based NFT projects are still half alive. A highly anticipated PFP project, KPR, chose to reveal its art amid the FTX collapse. After the art was revealed, KPR’s floor price took a huge hit, falling from 0.59 ETH to 0.32 ETH, a tremendous loss of 46%. However, an unbelievable event happened: the floor was swept by enormous buying power, lifting the floor price back to 0.59 ETH. What a rollercoaster ride! Nevertheless, the Azuki-PXN-vibe NFT project failed to sustain its price and began to fall when the FUD hit the NFT market following the FTX bankruptcy announcement.

The price movement of KPR. Source: NFTGo.