Crypto's Road to Redemption: Navigating the Post-2022 Failures and Charting a New Path Forward

[Music] yeah so this this is interesting to actually give this presentation just of the the previous panel so thank thank you very much for the for the confidence in M2 that was expressed just earlier nowok got a clicker that's good not sure it works I don't think that works so look 2022 was obviously a very interesting year for crypto a lot of investors have taken devastating losses a lot of other people think it was actually very necessary it was providing the necessary cleansing for some of the accesses that have been in the space for the for the years before that now let's take a brief look at what actually happened it probably started at the end of 2021 with the beginning of the quantitative tit in so interest rates went up um money left the space liquidity was withdrawn and in the in the consequence over 2022 the price of Bitcoin or the to Total crypto market cap decreased by about 65% consequently of course those players who were quite leveraged and exposed quickly found themselves in distress and there was many of them now all it took at the time was just one major event that started to start tipping them over the line that event of course was Tera Luna for those of you who don't know it was the underlying asset of a stable coin an algorithmic stable coin called us which deed spiral downwards and eventually completely crashed that took out about 60 billion in market cap within a matter of 2 or 3 days of course that then tipped the first ones over the lines the first one was one of the flagships in the crypto space pick then an investor called three hours Capital they had big exposure to teruna we already stretched and quite faced with margin calls and as a consequence had to close shop that was the first one then it hit the those companies that were lending to three's Capital Voyager was the first one they took a hit of 675 million within a couple of days as well had to F bankruptcy and then the chain began one Domino fell after another it was uh CSUS next then of course alamaa now look alamaa of course is a whole different story in the way it took down FTX uh there's more to be talked about that in fact films are being made out of it right now so I leave that to to another time in place uh but nevertheless clearly the the demise of that again sent other lenders onto their knees block five Genesis Etc so let's take a look at what were the underlying issu issues what caused all this ripple effect and of course there's a lot of small issues and a number of angles to look at but in my mind the two key aspects that really triggered everything comes down to two things the first one is good old risk management it it is clear that some of the behaviors there were still triggered uh by the intoxicating effects of 2021 everybody get really rich really fast people were still believing for that to be able to continue and we're prioritizing short-term rck profit over long-term risk management there was lame lending especially players like three Aros or or SPF were getting funding and and and loans without any proper due diligence being conducted few name lending because the belief was so strong in their capabilities but more importantly we all know that crypto is a volatile asset that's why we're in there this why we like it it has great upside opportunities but it also has the downside risks now those risk needs to be managed and mitigate it it's the management of of Market risk of counterparty risk concentration risk and there's easy ways of doing this but clearly that's the part that those players that were suffering in in 2022 did not have in place so that's a key thing in my mind that was missing the other one and that goes back to the to the regulatory discussion is transparency a lot of investors did not know when they lend or invest in a certain platform in what shape the organization or the protocol of the project was actually in how much risk exposure they already had how much leverage they had how much unrealized um losses they already had on the balance sheet um in some cases they weren't even aware that that vender with that partner was already moving assets off the platform so an investor thought it's on the platform it was given to third parties which completely changes the risk profile so the the risk benefit analysis or risk adjusted returns assessment couldn't even be conducted by investors because they didn't know what the risk they were dealing with in the first place so in my mind those are the two key aspects that really challenged or set off the the negative impact on the the the evolution of things in 2022 now what can we learn and what should we do differently when we invest now and of course some could say well the culprits of back then are wiped out it's cleansed right the cleansing has happened they're no longer there so the guys that survived the guys that are still here clearly knew their risk management they've done their homework they survived they knew what they were doing so they definitely there a starting point to trust and that's probably good strategy stick with the survivors they've proven that they can weather the storms so they're good place to invest now the challenge of that is crypto is a very Dynamic and exciting place so a lot of the investors don't want to just stick with what has been around for long they were looking for new opportunities and benefit from the upside from the exciting opportunities that crypto offers so how then as an investor do you select new projects new investment opportunities um in in everything that that can happen and the the key thing I I would personally look for is make sure you know who you're dealing with make sure the risk management is in place and make sure um it is it is in a in a clear and regulated place the reason I'm saying the the third one is of course there's opportunities in defi as well in other places especially for those that are new to crypto it's hard to figure out there's usually not enough information easily available to really assess the risk to really understand the risk benefit return uh ratio when dealing with and of course being a fully regulated player I'm talking my own shop here and full disclosure but uh if you if you invest in companies or with companies that are in a fully regulated jurisdiction obviously you have some protection from the supervision from from the supervisor in the jurisdiction and of course Abu Dhabi in the ad GM as we heard many times before today is the oldest and one of the most reputable Regulators in the world so there's strict regulation in terms of what has to be disclosed what can be done security and protection of the platform and the users so investing with somebody in in this in this jurisdiction is is a much safer bat to start with the second thing I'd probably look for is the management team look for teams that have been around long enough whove weathered storm who've been lying in the in the trenches bleeding after after their crisis who've experienced and know how to build policies procedures and systems that last for longevity not for short-term profit that's the second key thing the third one in terms of minimizing risks is also check if there's audited financial statements once you have an investment or invest in somebody who can produce audited financial statements of course the risk of numbers being misrepresented or not being accurate is much much reduced because there's an independent third party verification of those numbers now having talked a lot about the the gloomy side of things um we're now in a much better place than than 2022 just this year so far Bitcoin has actually gone up in in value by just check this morning 128% so those of us who had the stomach to hold on to our Bitcoins and other things actually double our money this this year which is a much much better feeling than what it felt like in in 2022 and even looking forward now we are at the verge of several major um spot ETFs being approved probably in January of which everybody expects a lot of institutional Capital to enter the market other than that of course it's also probably the end of quantitative uh tightening we're not easing it but at least the tightening seems to be over which again is is beneficial for the for the sector and finally um the next havening is about to happen early next year that historically has always been the beginning of major upward Cycles uh for for the crypto industry with all that future looks bright I wish all of you successful and safe Investments thank you very much