Insolvency, Bankruptcy And Brutal Crashes: Lessons To Be Learnt From The Crypto Market


The global cryptocurrency market has been hit with turbulent circumstances, and the market is still striving hard to make its comeback. This instability was followed by a liquidity crisis, unemployment, and an in-depth investigation of illegal crypto firms.

Market participants had assumed that the worst days had gone once the Terra (Luna) crisis blew over. However, that was far from true- it was followed by multiple firms such as three arrows capitalinformation three arrows capital Lending & Borrowing Followers : 0 View profile , celsius networkinformation celsius network [email protected] Lending & Borrowing Followers : 0 View profile , Vauld, and voyager digitalinformation voyager digital Lending & Borrowing Followers : 0 View profile declaring bankruptcy. In addition, well-known companies like Gemini and Coinbase too fell prey to the instability.

If there’s anything positive to come out of these circumstances, it is that the crypto community has now seen terrible days and is well-versed with reality. 

 During Bloomberg’s Crypto summit yesterday, July 19, Galaxy Digital’s CEO Mike Novogratz acknowledged that the crypto market had been through some miserable times recently, and these situations have damaged investors’ confidence. 

Mike Novogratz said the recent turbulence in the crypto industry is a “full-fledged credit crisis” and acknowledged that he was “darn wrong” about the magnitude of the leverage in the system

— Bloomberg Crypto (@crypto) July 20, 2022

The Luna Crash: A Lesson For All

Mike Novogratz, a prominent supporter of the Terra (LUNA) platform, even has a LUNA tattoo and calls himself a LUNA-tic

After the Terra (LUNA) crash in May, Mike Novogratz claimed that his tattoo will always remind him that humility is a pre-requisite for investing in any venture. He believes that insolvent firms met such a fate due to their greed and ignorance. 

Furthermore, Galaxy’s CEO said that Terra’s crash was an eye-opener and made us realize that the whole crypto market and investors do not have adequate risk management knowledge. 

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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