After the FTX incident, as the industry rebuilds consensus, what are leading institutions focusing on?

2022.12.01

After the FTX incident, as the industry rebuilds consensus, what are leading institutions focusing on?

After the FTX incident, panic spread across the crypto market, and centralized institutions affected by it emerged one after another.

2022.12.01 - 10:44:55

FTX

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After the FTX incident, panic spread across the crypto market, and centralized institutions affected by it emerged one after another.

After the FTX incident, panic spread across the crypto market, and centralized entities affected by it emerged one after another. Investors gradually lost trust in certain centralized exchanges that were unable to quickly prove their asset reserves, leading to more conservative and cautious investment behavior than before. Institutional participants, however, hold a different view—they believe this is precisely a valuable period for recovery. We have also noticed that many institutions are not only maintaining but even increasing their activity levels, actively upgrading infrastructure while reviewing past experiences and positioning themselves for the next bull market. On November 22, Coinbase released its 2022 Institutional Investor Digital Assets Outlook Survey. The survey was independently conducted by Institutional Investor Custom Research Lab between September 21 and October 27, covering a total of 140 U.S. institutional investors to clearly understand how decision-makers at American institutions perceive digital assets. The respondents manage approximately $2.6 trillion in assets, representing a sample of institutional investors, with data reflecting institutional sentiment and attitudes during the bear market. Key Findings:

Optimistic Building: Institutional investors increased their allocation to crypto assets during the cryptocurrency winter, using this time to learn and intensify investments in infrastructure development.
Technology Investment: Differentiated performance outcomes are the primary driver behind investor enthusiasm for the crypto space, with many indicating plans to increase investment in innovative technologies.
Risk and Return: Despite heightened market volatility, digital assets are still viewed as one of the most attractive opportunities for generating alpha.
Principles and Concerns: Compliance has become the top consideration when selecting cryptocurrency partners, with widespread recognition that regulatory transparency will be a key catalyst for future growth.

One question from the survey particularly caught our attention: Concerns about digital asset investment. Question: When considering investing in cryptocurrencies, which of the following scenarios concerns you the most?

After the FTX incident, industry rebuilding consensus—what are leading institutions focusing on?

Among the various factors influencing their consideration of digital asset investments, investors identified regulatory uncertainty as the top concern, clearly expressing a desire for clearer regulations. Nearly half (47%) of investors view events such as the Terra Luna collapse and the 3AC bankruptcy as calls to action for policymakers to create a level playing field and enact urgently needed regulatory frameworks. More than one-third (36%) of respondents believe these incidents serve as important reminders for companies to adopt better risk management practices. In daily business interactions, we’ve found that even some early-stage professional institutional participants still have shortcomings—ranging from minor to significant—in areas such as asset security, risk control, operational compliance, and on-chain trustworthiness. This is also one of the main reasons why many crypto businesses have short lifespans. A single security incident or margin liquidation rush can be enough to force an institution into rapid bankruptcy. At the same time, there are also many outstanding institutions within the industry that remain unscathed through each black swan event. How do they achieve this? To seek answers, Cobo invited several exceptional long-term institutional players—those who have fully experienced the most recent cycle—to discuss the following topics:

Current market conditions and trend analysis
Institutional response strategies and outlook amid liquidity drought
Post-mortem analysis of the FTX incident and proposed solutions
Challenges in institutional fund management, practical barriers and misconceptions behind the MPC boom
DeFi investment teams’ perspectives on on-chain risk mitigation and optimization

On Wednesday, December 7 at 8 PM, Cobo CEO & Co-founder Shenyu will join other distinguished peers to deeply explore current institutional challenges and share strategic thinking for the next phase. Everyone is welcome to attend. Let’s spend two insightful hours together!

After the FTX incident, industry rebuilding consensus—what are leading institutions focusing on?

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Cobo

After the FTX incident, as the industry rebuilds consensus, what are leading institutions focusing on?

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