The crash of FTX, which was the second-largest crypto exchange in the world, sparked alarm across the crypto industry. Some even called it the “Lehman moment” of digital assets, invoking memories of the collapse of the leading investment bank in 2008.
When FTX collapsed, market watchers’ eyes turned to Tether, the biggest stablecoin by market cap, which underpins a large portion of the sector’s economy. In the aftermath, Tether slipped off its currency peg, trading at $0.98 briefly, before returning to its peg.
Questions of Coinbase, Binance, and many other big industry players have become regular chatter. Contagion has spread, but not ‘too’ badly… yet.
Implications for the broader market
The broader financial system’s resilience to cryptocurrency woes has been put to the test over the past year against the backdrop of a harsh “crypto winter.” In November 2021, the crypto market peaked at $3 trillion. According to CoinMarketCap, it’s currently just over $800 billion. World markets have suffered over the past year too.
Why it’s important to use reliable platforms
With FTX crashing, it’s more vital to use safe crypto exchanges than ever. Investment education apps like Invezz can help you avoid dodgy exchanges and stay safe. Michael Charalambous, Director at Invezz told us that:
“Binance and Nexo are two examples of reputable and safe exchanges. Nexo has real-time asset auditing by independent third parties, and doesn’t take risky loans. Neither have the transparency we need, but both are credible and well-balanced in comparison with the types of risky investments & dodgy practices at FTX. Ultimately, we tend to recommend users fund accounts with reversible payment methods, for instance by finding a safe PayPal crypto exchange – or simply holding your funds in a secure cold wallet. It really depends on your experience levels in the market.”
Binance has some of the lowest fees of all crypto exchanges. If you pay them in Binance Coin (BNB), its native token, there are further discounts.
As the biggest exchange in the world, Binance always has enough liquidity to facilitate trades with no shortage of crypto trading options. You can exchange hundreds of currency pairs, trade Bitcoin futures, or buy or sell crypto with fiat currencies. The only potential issue is intuitiveness. The platform is not the user-friendliest out there, but people eventually learn the ropes.
Nexo is another popular cryptocurrency exchange. It’s a great platform to earn interest on savings in fiat money and crypto. More than 300 crypto pairs are available for trading on the platform, and users can earn interest on three fiat currencies and over 30 cryptos.
Safest payment methods
Two of the safest payment methods are debit cards and PayPal. Debit cards are one of the most familiar forms of payment and also one of the most secure methods. The debit card issuer encodes transaction details, which are encrypted. Most debit card providers conduct regular screening and monitoring for suspicious activity, and the customer is not liable in the event that fraud does occur. They get their money back if they can prove they didn’t authorize the transaction.
PayPal is another safe online payment method. The customer’s data is secure because a payment gateway handles payment services. The transaction is managed by a payment processor, enabling a reliable and secure transaction.
Bank transfers are still a popular payment method, but they have their disadvantages. Banks typically charge a fee to send money. In addition, a fee might also be payable to the recipient’s bank. If you want to convert currencies, you will be hit by the bank’s poor exchange rates – banks have some of the worst rates of all financial establishments. Ultimately, you’ll lose money.