Is 2023 where crypto will go to die? After a nearly apocalyptic 2022 that saw the collapse of one of crypto’s largest players, questions about the future of the nascent industry have been swirling at tornadic speeds. The swift and sudden collapse of FTX, formerly the third-largest cryptocurrency exchange in the world, put intense scrutiny back on the digital industry, with U.S. lawmakers this week growing increasingly eager to implement regulations to rein in bad actors, cut down on fraud and reduce the risks to investors big and small. This comes as former FTX CEO Sam Bankman-Fried was arrested in the Bahamas on Monday, facing a raft of fraud charges from U.S. prosecutors in connection with the exchange’s collapse last month.
Will crypto survive the latest scandal? With the U.S. staring down the barrel of a potential recession, will investors start to pull out of crypto as they have been with the big tech companies? What would that mean for the overall economy?
Mark Hooker, teaching professor of economics at Northeastern and long-time crypto skeptic, says that cryptocurrency transactions make up a “trivial”—albeit, growing—“share of overall transactions” in the economy. With such a minimal economic foothold, an industry-wide crypto collapse is quite possible, he says. And, he says, it would have “next to no impact” on the economy.