Find out “Which Australian investors have suffered the most in the recent crypto crash?” Arguably, 2022 may have been the hardest year yet for crypto investors worldwide, and Australians are no exception. With the FTX and Terra-Luna debacles still looming, it is fair to say that the market is still a long way from recovery.
Here are some of the Australian-listed companies that have seen losses in their cryptocurrency holdings over the past 24 hours.
1. DigitalX (ASX: DCC)
DigitalX Limited (ASX:DCC) is an Australian blockchain company that has been a pioneer in the space. In recent months, however, after the cryptocurrency market crashed massively due to regulatory uncertainty and security concerns associated with the cryptos themselves, many companies have taken a hit.
And DigitalX Limited is no exception, its share prices have fallen by over 95% since January 2018. Additionally, the ASX-listed blockchain company has seen its cryptocurrency holdings take a hit in recent months.
On 30 November 2022, the company reported that the value of its holdings fell by 27% from $16.6 million to $11.9 million in just a month. In response to the current crypto uncertainty, DigitalX’s share price fell by 32.5% over a span of 6 months.
2. Telstra Ventures
Telstra Ventures is the venture investment arm of telecommunications giant Telstra. And recently, it was revealed that Telstra Ventures had sunk a significant amount of its $350 million investment fund into FTX.
Given that companies worldwide are still reeling from the effects of the FTX crash, it’s highly likely that Telstra Ventures will be rethinking their investment decision. And now, general partner Yash Patel probably has some serious explaining to do given his eagerness to invest in FTX.
3. Swyftx
Another company hit hard by the recent crypto instability is Swyftx which has since been forced to lay off about 40% of its staff. It is an Australian-owned and operated crypto exchange that allows users to buy Bitcoin, Ethereum and a variety of crypto assets.
Prior to FTX’s collapse, the company had already begun implementing various cost-cutting measures in response to worsening economic conditions. And now with the ongoing crypto crisis, things are not looking good for the company.
Why did FTX go under?
Those who have followed the crypto market closely since its collapse in January may have a few theories as to why FTX went under.
1. A major crypto heist
One reason why could possibly be the major loss of liquidity due to hackers stealing $600 million worth of cryptocurrencies just days after the exchange declared bankruptcy. This occurred when the company was moving digital assets into cold storage.
And as a result, FTX wallet holders reported $0 balances in their wallets in the aftermath of the company’s collapse and hack. You can visit Tezro blog to find out more trustworthy alternative wallets in Australia.
2. Incompetent management
Prior to FTX’s collapse, Sam Bankman-Fried was hailed as a genius by many and admired for his vision. But at that point in time, little did they know that Bankman-Fried was behind the wheel of an out-of-control freight train.
According to experts, FTX was a poorly managed company that didn’t use financial statements and lacked proper documentation. Predictably, this led to huge losses and a looming global cryptocurrency crisis.
3. Binance liquidating its holdings of FTT tokens
On Nov 2, 2022, Binance’s CEO Changpeng Zhao sold his stake in FTX back to Sam Bankman-Fried, who paid for it partially in FTT tokens. FTT tokens is FTX’s native cryptocurrency which traders use for various operations.
Then, 4 days later on Nov 6, Binance announced that the company was liquidating all of its FTT tokens. This caused the price of FTT to crash and led to a massive selloff as investors rushed to sell FTT.
When that happened, shareholders began liquidating their FTX stock, fearing that the company would go under. The huge number of withdrawal requests amounted to a rumored $6 billion and when FTX could no longer meet its obligations, the company declared bankruptcy.
Conclusion
The Australian cryptocurrency market has suffered greatly since the beginning of 2019 and many companies have seen huge losses. It remains to be seen whether or not this is just another temporary setback or if it will lead to further economic uncertainty in our country.
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