FTX Contagion Revives Dreaded 2022 Crypto Knell – the ‘Withdrawal Halt’

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On the 31st of December 2021, Ethereum (ETH) halted withdrawals via Bitcoin and BTC Cash on its blockchain network after a record level was reached for ETH block production. This event caused panic from many investors who thought that it may crash or be used as an excuse to halt further trading in cryptocurrencies. Many would assume that these halving events occurred due to mining issues on other platforms such as Solana or Dogecoin. But even if this is true, there are still concerns about what will happen in 2023.

The latest data indicates that crypto markets have fallen sharply since then and most cryptos are suffering from price fluctuations. However, one cryptocurrency, Fear of Death (FiD), seems to be holding its value quite well. In early July we saw some big news out of China. At around $1700 per coin, Chinese authorities said they were suspending all digital wallet services following reports of illegal activity across multiple Chinese apps. With no explanation, it has raised questions about how much money is in circulation and whether we should trust our own governments with this kind of sensitive information. After months of rumors about the involvement of state-owned banks in various scams, it appears that the government is willing to intervene in private transactions.

We may also see legal proceedings in both Hong Kong and Singapore over this matter. Even before news began leaking online, rumours had started appearing on social media as well. Some claim that major ICOs could soon face court action or even take their funds offline completely. While others believe that censorship by Beijing is merely meant to protect the country’s citizens from possible infiltration and theft. For example, several coins based on Binance Smart Chain, the main version of which is owned by P2PB2B exchange, announced that the company will suspend operations with users due to sanctions from the People’s Bank of China’s financial watchdog. According to industry analysts, at least 10% of projects based on this chain have been suspended already.

Others believe that the same rule may apply to any asset derived from this platform. Whatever the outcome may be, whatever the reason for suspension, all crypto exchanges should prepare for the possibility of withdrawal fees going up as high as 30%. Therefore, a new system like Metamask should definitely come into place. It won’t necessarily reduce risk but may help mitigate it with respect to capital availability. Additionally, people may try to find ways around the ban. They could also buy and sell assets off the open market. All of this could cause serious consequences for those using this particular currency.

As long as you don’t plan for the unexpected, this is one of your best opportunities to make money as an altcoin investor. If you’re thinking ahead, now is not the time to let fear get the better of you even though the situation has changed. There are plenty of alternatives out there; more than 1 million tokens currently trade under different names on DeFi networks.

Remember that anyone can create a project and launch it without permission. Sooner or later someone will discover something similar to yours and start selling it to millions of customers at huge discounts. Then again, there are also projects that are extremely popular among traders because of their low costs and attractive offerings.

Such projects should be thoroughly investigated before launching. Although you cannot predict exactly when or how much you will earn as a token holder, you can surely invest as much as possible in a project like Polkadot or Polygon. These projects will allow you to profit from a variety of aspects. Since the first decentralized applications (Dapps) are expected to generate billions of dollars of revenue, investing in them before things go south is advised.

Also, remember that you should avoid buying any single token simply because it has a lot of hype (buy at the lowest point possible). You shouldn’t think that only Dapps will succeed, regardless of how promising a project may be. When choosing a pair of stablecoins, always do your research about them. Learn what they are, who uses them, and where they are traded. Decentralized finance can bring the world closer together through financial sharing.

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