The FTX collapse has revived the narrative that “Bitcoin maximalists were right all along.”
Given the size of the troubled exchange and the number of entities caught up in its web, the FTX scandal has dominated headlines of late.
Worse still, each passing day seemingly brings further twists that point to serious failings within the company and among the regulatory bodies which were supposed to prevent such scandals from happening in the first place.
In particular, questions hang over Sam Bankman-Fried’s (SBF) political influence and connections, as well as FTX’s apparent “pass” with the Securities and Exchange Commission (SEC).
Behind the veil of high-profile sporting and celebrity endorsements, FTX managed to build a trusted reputation within its relatively short three-and-a-half years of existence. Although skeptics said the red flags were always there, that is no consolation to those who banked on FTX and lost big.
At the heart of the scandal lies FTX’s native FTT token and the way it was managed. In the course of a liquidity stress test, it fell short of justifying its lofty pre-collapse $3.4 billion market cap valuation.
The net result of the scandal is the loss of billions and an industry scrambling to preserve what little reputation and credibility remain.
Undoubtedly, the bankruptcy has birthed a new wave of Bitcoin maximalism, and as some might say, their vitriol towards sh*tcoins has proven to be on the mark time and time again.
Self-custody Bitcoin as the answer
The leading cryptocurrency is simple in design and by all accounts a dinosaur in terms of technology. However, maxis point out that these same “deficiencies” are what makes Bitcoin the only digital asset to hold.
On the bases that Bitcoin has no overseeing foundation, crooked incentives, or groups with special rights, maxis argue that the tenets of decentralization, transparency, and immutability are applicable only to BTC.
In passionately defending this view, the Bitcoin-only crowd has been labeled toxic and narrow-minded in the past. Yet, the events of the past week demonstrate a degree of truth, at least from the perspective of anti-Ponzinomics as applied to exchange tokens.
With hit after hit coming from Celsius, BlockFi, Voyager, Terra Luna, and more, the penny is beginning to drop. Trust, simplicity, and honesty trump yield and short-term gain.
As the industry emerges from the FTX black swan, the BTC maxi movement will only grow stronger.
Altcoins are “evil”
On-chain…
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