That Was Ugly but Crypto Will be Okay

November 16, 2022

Cryptocurrencies: Weekly Update


The past week has been tragic for the cryptocurrency market with the collapse of FTX creating a contagion of fear and distrust in the rest of the industry. The entire situation regarding Sam Bankman-Fried and any others involved will take months if not years before users get any kind of clarity on what happened to their funds and if they will ever get them back.

FTX looks to have been the definition of a bad actor, with evidence coming last week that $600M of remaining funds held by the company were ‘hacked’ and stolen not long before they officially declared bankruptcy. FTX fell due to a combination of bad bets and mismanagement of user funds outlined in this New York Times article that came out last night.

Right now crypto seems as ugly as ever, but we will push forward the same that we have after each of the previous black swan events in 2022 that left crypto hopefuls in the dirt. 

Although the FTX blowup is easily the most significant of this year, it is not necessarily an unprecedented event given the full history of crypto. We’ve seen several instances in the past where one of the biggest, if not the biggest exchange collapsed overnight and caused the market to go down with it.


Early 2014 saw Mt. Gox get hacked, Bitfinex got hacked and wiped out in 2016, The beginning of Covid-19 crashed everything overnight, and now FTX is being discussed as if it's the nail in the coffin for the cryptocurrency market. This is not the end for crypto, it's just time to take a pause and reevaluate the space as it currently exists.

There has never been a more obvious need for regulation in the industry than right now, and with recent events, we’re likely to start getting more crucial oversight on the crypto space very soon. As it stands, the safest exchanges for US users continue to be Coinbase and Kraken, with Coinbase being the only SEC-regulated cryptocurrency exchange and both being registered/regulated by FinCEN.

Although Coinbase and Kraken are perfectly fine options for storing your coins and crypto investments, there has also been an industry-wide reminder of the common phrase, “Not your Keys, Not your Coins” referring to self-storage of your coins in a decentralized wallet rather than keeping them in a centralized exchange. If you are still holding crypto and are interested in self-storage, we recommend looking into Ledger as a reliable hardware wallet, while Trust Wallet and Coinbase Wallet are solid options for software wallets you can easily download on your phone or computer.

Despite all of the chaos that has happened and is probably sure to come, the market has only dropped by about 20-25% with the exception of a handful of coins that were specifically tied to FTX. Solana (SOL) looks to have been hit the hardest out of all large-cap coins, down more than 60% since the FTX news first broke. This isn’t to say that SOL is dead just yet, especially as it touts one of the largest networks of users in Web3.

Even amongst all the dread, there are other coins that have actually still had their own individual good news and have actually held up relatively well. Our list of top tokens actually still shows 3 coins with positive trend strength indicator (TSI) scores:


Polygon (MATIC) has become a frequent topic of discussion in our reports, and today Nike announced that they’ll be building their own NFT platform on the blockchain which coincided with a new record in the number of active addresses on the Polygon network.

Uniswap has also been consistently rallying since the initial FTX shock thanks to inflows of funds into the decentralized space amidst fears of centralized platforms.

All of this is just to show that even when things are melting down, there is almost always still an opportunity somewhere in crypto to outperform the rest of the market. If you’re following the CryptoPulse Quant strategy, don’t be surprised if we see an entry into one of these symbols before a potential relief rally like what we saw back in June.