Waving Goodbye to Centralized Exchanges

2022 was like that rollercoaster ride you thought was going to be fun but turned out to be incredibly messy. One of the biggest spills came from the infamous FTX collapse, leading crypto enthusiasts to rethink their spread on centralized exchanges. Investors were forced to shout, ‘You had one job!’ as they watched their investments unravel.

The Dark Side of Fractional Reserves

Let’s unravel this concept of exchanges acting like sneaky fractional reserve banks. Just like your buddy who insists he has enough snacks to share but secretly hoards them, many exchanges were caught red-handed when panic withdrawals hit. The phrase “If you don’t know where the yield comes from, you are the yield!” became the new mantra for cautious investors navigating these turbulent waters.

Self-Custody: The Comeback Kid

Locking up valuables in a vault might have gone out of style in the age of digital everything, but self-custody is the new must-have accessory for savvy crypto investors. Reports indicated record numbers of Bitcoin and Ether being hoisted out of exchanges and into the sanctuary of hardware wallets. This trend is set to stick around, especially if more stories of insolvencies keep circulating.

Decentralized Finance and the DEX Surge

With trust in centralized exchanges plummeting, decentralized exchanges (DEXs) are basking in the newfound popularity. It’s like watching an underdog emerge victorious – DEXs saw a surge in activity, as investors began to flock to more transparent alternatives away from the centralized chaos.

Looking Ahead: Ether Under the Microscope

Meanwhile, Ether is hoping to survive the storm with some technical analysis support. The buzz around Ethereum’s future upgrades and the slight unease about when staked coins can be withdrawn raises eyebrows. If history teaches us anything, the road ahead may have some bumps, and cautious investors might want to keep their short positions ready until things settle down.