Since the bankruptcy of FTX, the exchange whose CEO was Sam Bankman-Fried, many vicissitudes have taken place in the blockchain industry. For example, Bitget, the industry-leading cryptocurrency derivatives exchange, has experienced strong growth in market share despite its turmoil.
Alternatively, Binance, the world-renowned exchange whose CEO is Changpeng Zhao, has seen increased withdrawals after the FTX fiasco. CZ himself, in fact, had agreed to make the exchange’s Proof of Reserves public in order to protect and reassure investors.
Unfortunately though, following the implosion of FTX many other companies found themselves forced to file for bankruptcy, including BlockFi.
Summary
Bitget’s situation: despite FTX’s bankruptcy it is holding out and growing
Despite the severe crypto winter faced by the entire industry, the Bitget exchange has entered the Top 3 derivatives exchanges, with a 2.6-fold increase in market share.
Thus, Bitget has become one of the world’s top three cryptocurrency exchanges in the derivatives industry thanks to huge achievements, such as a 2.6-fold increase in market share and 8 million registered users in more than 100 countries globally.
As we know, 2022 was one of the most difficult years for the cryptocurrency industry, which saw the failure of Terra LUNA and FTX, consequently wiping out more than $2 trillion from the cryptocurrency market.
However, despite the market’s difficulties, Bitget has grown in all respects. In fact, over the past 12 months the company has made great strides in building its team, brand, and business.
For example, according to the latest TokenInsight report, Bitget’s market share in the derivatives market increased from 3% to 11% after the collapse of FTX. In addition, there has been over 300% increase in total transaction volume with the popularity of copy trading products.
Not only that, the workforce has grown from just 200 people at the beginning of 2022 to over 1100 employees in January 2023. This is also thanks to the platform’s flagship offering, One-Click Copy Trade.
Which, as of December 2022, has attracted more than 80,000 traders and over 338,000 followers with more than 42 million profitable trades, leading the industry in the copy trading market.
Among all exchanges affected after FTX’s collapse, only Bitget experienced a significant increase in open interest, rising from $841 million to $3.74 billion, a total increase of 344%.
Gracy Chen, managing director of Bitget, said in this regard:
“Our results for the year are nothing short of remarkable and make us a dark horse in the face of black swan events. Even though there have been some negative events in the industry, Bitget has remained steady in its growth and has taken this opportunity to further strengthen its capabilities.”
The Proof of Reserves from the exchanges: Bitget and Binance
In addition, given the situation that led to the collapse of SBF’s platform in the first place, Bitget is safeguarding user funds on the platform with a number of security policies, including a $300 million protection fund, a safekeeping service for funds, with a commitment to be fully audited by the Merkle Tree Proof of Reserves model.
As mentioned earlier, even the popular exchange Binance at first saw a significant increase in withdrawals on the platform following the collapse of FTX. However, CZ’s exchange is another good example of a platform that has continued to function normally despite the drop in digital asset prices.
In fact, although Binance saw a “slight increase in withdrawals,” according to Zhao’s statements, this was in line with typical activity during periods of cryptocurrency market decline.
In fact, CZ had stated the following:
“Every time the prices go down, we see an increase in withdrawals. It’s quite normal.”
This is because, unlike many other platforms, Binance has not seen 80% withdrawn from its cold wallets or 50% of the funds flowing from their platform. Returning to the subject of Proof of Reserves, we see that, in December, the exchange made public details about its crypto wallet addresses.
In fact, Binance had hired an outside accounting firm to prepare its Proof of Reserve (PoR) report, which covers the portion of its assets and liabilities, including a small parenthesis on financial data.
However, shortly thereafter Binance’s Proof of Reserve was deleted from the website. The news naturally generated some panic among investors on the large exchange platform. Added to this was the fact that CZ had made no statement on the matter.
However, the CEO of Binance was clear in explaining that all investors should trust blockchains, as they are great collectors of secure and reliable information.
Bankruptcy for Celsius and BlockFi
Toward the beginning of December due to the collapse of FTX, BlockFi was one of the companies to file for bankruptcy. The company, in fact, which specifically deals with cryptocurrency lending, has had a rather complicated year, as has the entire industry.
Indeed, BlockFi first announced the discontinuation of its financial activities, stating that its main priority remains to make the best interests of its customers, and that the bankruptcy process, which is transparent, is the ideal way forward.
A few months earlier, in July, Celsius also initiated bankruptcy proceedings. In this case, the main cause of the platform’s collapse was the implosion of the Terra Luna ecosystem in May of that year.
In any case, the situation in the crypto market following the FTX collapse is not thought to be a systemic phenomenon or that the cryptocurrency universe has systemic problems.
Of course, some private equity investors have undoubtedly lost money with this single company, but the issue is not estimated to extend beyond that. Bitcoin and, more broadly, the cryptocurrency universe, are going through a lot, but that does not invalidate the concept behind the blockchain industry.
