Founder and CEO of Global macro investor (GMI) and Investment Strategist, Raoul Pal has taken to Twitter to predict what might happen to the crypto market after the FTX implosion.
According to Bloomberg, FTX and its subsidiary FTX.US has filed for bankruptcy, chapter 11. In a thread of tweets, Rauol pal cites a similar example of the FTX implosion that happened in the futures market.
He wrote: ‘’If it’s any consolation, myself and many others went through something very similar to FTX back in 2011. MF Global, one of the largest futures brokerages in the world, run by “superstar” ex-Goldman CEO, Jon Corzine collapsed in a very similar manner to FTX’’.
He explains how it all happened: ‘’Brokerages MUST segregate customer and “house” funds. Corzine decided to take a $6.5bn debt of EU gov bonds which went wrong. The issue was that he did it with customer money! (hmm…familiar?). Losses were estimated at nearly $2bn. All customer positions were frozen’’.
‘’It took about 7 years for us all to get 93% of our money back. If I remember rightly we got the first 50% back pretty fast, which I was grateful for! It was my entire trading account. Many hedge funds and asset management firms got trapped too. It was a total disaster’’.
He added, ‘’But it wasn’t the end of futures brokers or the future markets. Markets recovered quickly.MF Global soon disappeared from the headlines as yet another financial collapse in the history of so many over the last 100 years that we can’t count.Humans/leverage/greed…endlessly’’.
He predicts what might happen to the crypto market after the FTX implosion, he says ‘’The crypto markets will move on. And sooner than you expect, most likely. They’ve already faced many such events but this was the largest, as MF Global was in futures brokers. This was not a crypto story but a story of traditional finance masquerading as something else’’.
Cryptocurrency analyst and trader, Capo is warning of a further drop in prices after a rough week for crypto. He says that Bitcoin (BTC), Ethereum (ETH), and altcoins are all set to see double-digit percentage losses.
He wrote: “For the last capitulation event, which should be this week, I expect:16-20% drop on BTC, 36-40% on ETH and 40-45% on altcoins.”
Bitcoin is trading down 5% at $16,689 at the time of writing, while Ethereum is changing hands at $1,274, down 3.18% in the last 24 hours.
Capo predicts an incoming significant drop for TRX. From the charts, it appears that Tron is forming a descending triangle and the crypto analyst expects it to fall by around 60%.
Tron is trading at $0.0561 at the time of writing. On Cardano (ADA) and Polkadot (DOT), Capo says that both could form a local bottom after falling by up to 49% and 40%, respectively.
Besides setting the bottom targets for Bitcoin and Ethereum, the crypto analyst also says that the crypto exchange token FTX (FTT) could crash by over 99%.
“Potential targets for a local bottom after capitulation event: BTC $13,000 – $14,000. ETH $700 – $750. ADA $0.18 – $0.23. LTC $29 – $32. DOT $3.4 – $3.6, FTT $0.000001?
Cardano is trading at $0.35 at the time of writing, while Polkadot is changing hands at $5.71.
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