Fraud- Bankruptcy and the Start of the Bear Market in Earnest

Numerous commentators have made analogies to other notorious corporate scams that took place after the apex of the dot-com frenzy in 2000 and the top of the housing bubble in 2006–2007. The two most convincing similarities are to Enron, a collapsed energy trading firm in December 2001, and Bernard L. Madoff Investment Securities, which founder Bernie Madoff admitted to having misrepresented customer profits for at least 17 years and which was shut down in December 2008. Both companies, like FTX, were trading businesses that were regarded as cutting-edge feats of financial engineering. All three were founded on the reputations of their separate bull market apex leaders who were shrewd financiers.

History has rendered a favorable judgment. The 93% fall in Coin matches the 98% decline in FTX Token. 

Another unique feature of FTX is that it became known as the best cryptocurrency even as the value of its token fell. When the company offered to save struggling cryptocurrency lenders BlockFi Inc. and Voyager Digital, another cryptocurrency exchange, in June of this year, some welcomed it as a rescuer. Naturally, their slender lifelines broke in November. The legal team representing Voyager Digital expressed amazement, resentment, and dismay at having to restart the bidding process for its troubled assets. Not everyone was like them. The demise of FTX was characterized as "unforeseen," "totally unexpected," and "shocking" by many financial writers.

For those studying market psychology, it wasn't, though.

Everything suggests that the bull market attitude that FTX's advertisements and sports promotions portrayed during the peak is still very much alive. FTX was still regarded as the "source of stability" for the cryptocurrency world through October. According to a November 16 Bloomberg article titled "FTX Was an Empty Black Box All Along," "Only now is the alarming extent of this debacle becoming obvious for average investors."

Remain tuned. There must be much more to come if the remaining credulity accompanying the previous increase can motivate a scam enterprise bailout of additional "fallen angels."