Big-Time Bankruptcy in the World of Crypto

As you might imagine, an economic depression will bring widespread bankruptcies.

Indeed, in Robert Prechter’s Last Chance to Conquer the Crash, he offered a suggestion for those seeking steady employment when times are tough. Here’s part of what the president of Elliott Wave International said:

There will be a boom in bankruptcy services in a depression; maybe you can keep out of debt by helping others manage theirs.

Well, some of those who already handle bankruptcies have their hands full with a major crash in the crypto world (ABC News, Nov. 11):

What FTX’s bankruptcy filing means for the future of digital currency

Crypto trading platform FTX is filing for bankruptcy and its CEO has resigned.

FTX was valued at $32 billion earlier this year.

The August Elliott Wave Financial Forecast warned about the froth in cryptos and had a section titled “The Exchanges Tell the Story.” Here’s a quote:

In bull markets, financial exchanges are celebrated houses of commerce enjoying popular exaltation. In bear markets, they are necessary evils that need to be curtailed. This very dependable correlation is the reason we’ve tracked a dramatic turn in the valuation of crypto exchanges over the course of the last 15 months. In classic fashion, crypto exchanges bathed in celebrity associations at the final highs. Some attached their names to major sports venues such as the FTX Arena in Miami and the Arena in Los Angeles. The share price of each of those exchanges is down significantly in 2022. [In July, we showed] declines of more than 90% in Voyager Digital and Coinbase Global from early 2021 when the Elliott Wave Financial Forecast identified them as candidates for steep falls. These selloffs attest to the potential for further declines in crypto… [emphasis added]