OPINION: The disappearance of FTX, Celsius, Voyager and a few other crypto exchanges opens opportunities for newer, well-managed companies to take leadership positions. It is time for the third generation of digital asset companies to emerge.
The blowup of crypto platform FTX and the saga of founder Sam Bankman-Fried are still unfolding, but this is a good time to contemplate where the virtual currency industry goes from here.
Brian Armstrong, founder and CEO of Coinbase, and Jesse Powell, founder and chairman of Kraken, deserve substantial credit for growing the cryptocurrency market within the U.S. to the extent that the Board of Governors of the Federal Reserve reported in their “Economic Well-Being of U.S. Householders in 2021” that 12% of adults held or used cryptocurrencies in the prior year.
FTX, Celsius, Voyager and others are bankrupt, and Gemini is experiencing well-publicized difficulties and has frozen certain withdrawals. Customers flocked to the products that appeared familiar, such as gathering deposits, paying interest on them and lending out the money, and other banking-type products. But these shadow-banking activities tended to lead to the collapse of crypto firms.
Larger, established entities are moving slowly into digital assets. Fidelity recently announced support for crypto trading, and it is joining other financial institutions including Robinhood Markets HOOD, -2.40%, SoFi Technologies SOFI, -0.45% and Vast Bank. These companies are part of the movement but are not true third-generation firms.
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