Crypto forecasting on the impact of the FTX process

The trial concerning the FTX case is about to begin, and predictions are circulating about the impact it could have on the crypto markets. 

In particular, the trial concerns the founder and CEO, Sam Bankman-Fried (SBF), as he has pleaded not guilty. Other people involved in the crack, on the other hand, have already pleaded guilty, so their proceedings are less interesting. 

Forecasting FTX’s crypto trend

FTX’s token, FTT, is still present in the crypto markets. 

After collapsing from $25 to less than $2 in November last year, the collapse has come to a halt. 

It is true that in early January it even fell below $1, but only to rebound and even return above $2 at the end of the month. 

Thereafter during 2023 it continued to fluctuate between $0.8 and $2.5, or roughly around that $1.5 it touched just after the November collapse. 

The current value of about $1.2 is within the fluctuation band that has persisted for almost a year, and over the past thirty days it has even risen 15 percent. 

So it seems that the markets have fairly optimistic forecasts about the outcome of the process. 

The return of funds

In fact, for months now it has seemed possible that FTX might be able to give something back to customers who lost all their deposits on the exchange once it closed. 

It should be mentioned that once the company went into bankruptcy, it was turned over to an experienced bankruptcy trustee, John J. Ray III, who has handled even more sensational bankruptcies in the past, such as that of Enron. 

The old management was ousted en bloc, and the new management is only concerned with recovering as much money as possible to return to customers. 

Although the US Chapter 11 would also allow for a restructuring of the business aimed at a reopening, in this case the reopening of the business seems ruled out, but not the reopening of the platform to withdraw funds. 

Throughout the year, however, moments of great hope have alternated with moments of disappointment, with no clear line leaning toward a certainly positive solution to the situation. 

The SBF trial and forecasting the crypto market.

Added to all this is the criminal trial of SBF, which is about to begin. 

Some predictions are circulating regarding the outcome of the trial, and especially its impact on the crypto markets. 

First, many are convinced that a conviction will come, as SBF is considered by many to be the real culprit in the crack. 

In addition, many are convinced that the crypto market will continue to move forward anyway, regardless of the outcome of the trial. 

The most interesting prediction, however, is another. Indeed, there are those who believe that in the event of an exemplary conviction-which is by no means absurd-this could set a precedent capable of acting as a powerful deterrent against similar initiatives. 

Indeed, it is possible that SBF itself greatly underestimated the risks it was taking when it decided to run FTX in that way. And at this point it is also likely that others have made the same mistake. 

In the case of an exemplary sentence, for example similar to the one imposed on Bernie Madoff, the message that would be sent would be quite clear: those who mismanage a crypto exchange end up being heavily punished. 

We will have to wait for the outcome, however, and given SBF’s own strong opposition to admitting responsibility, it is by no means certain that it could be a short-lived process. So it could be several months, or even years, before we see the consequences. 

The impact on crypto markets

Comparing the price trend of FTT with that of Bitcoin over the course of 2023 shows that they turn out to be uncorrelated. 

The only thing they have in common are peaks, but while for BTC they have been ascending, for FTT they have been descending. 

Moreover, the current price of the FTT token is similar to that of the beginning of the year, with a gain of less than 30 percent. In contrast, that of Bitcoin is significantly higher, close to 70%. 

In other words, if BTC’s price trend over the course of 2023 seems to have influenced FTT’s in no small part, the reverse has certainly not been the case. 

From this it could be inferred that so far FTX-related issues this year have not had a significant impact on crypto markets, while the opposite has been true. 

Things could change, however, when the outcome of the trial is finally published, although it will take months. In the event that SBF more or less succeeds in getting off scot-free, no significant movement is expected in crypto markets, but in the event that an exemplary conviction comes, the repercussions could be positive.