In the wake of FTX’s collapse, cryptocurrency users are seemingly moving their funds to wallets they control on-chain. Cardano ($ADA) wallets have, for example, seen their growth accelerate over the past few days.
According to data from Cardano Blockchain Insights, the number of Cardano wallets has recently grown by well over 30,000 in a week, going from around 3.638 million to 3.671 million in just a few days.
The accelerated growth of Cardano wallets on the cryptocurrency’s network comes after the collapse of popular cryptocurrency exchange FTX, which endured a bank run last week. The bank run saw FTX halt withdrawals and, later on, filed for Chapter 11 bankruptcy protection. Its CEO Sam Bankman-Fried stepped down and was succeeded by John J Ray III. In the filings, FTX indicated it has more than 100,000 creditors, assets in the range of $10 billion to $50 billion, and liabilities in the same range.
The exchange has since been hacked as its newly appointed CEO John J Ray III said in a statement that “unauthorized access to certain assets has occurred” and that the firm was in contact with law enforcement officials and regulators.
After FTX’s bankruptcy filings, contagion hit the cryptocurrency space, and confidence in centralized platforms was severely affected. Cryptocurrency lender BlockFi has suspended withdrawals and won’t be “able to operate business as usual” given the bank run on FTX and the lack of clarity as to what is happening with the cryptocurrency exchange.
Circle co-founder Jeremy Allaire likened FTX’s liquidity crisis to the Lehman Brothers’ collapse in 2008. Several cryptocurrency exchanges, including Coinbase and Kraken, have distanced themselves from FTX, clarifying they had no exposure to the exchange.
Confidence in centralized custodians has nevertheless taken a hit, and as a result various users have been moving their funds to wallets they control on-chain. As CryptoGlobe reported, the crypto community is bullish on $ADA, as estimates point to the smart contract platform’s price trading at $0.517 by the end of November, representing a 27.7% rise from $ADA’s current $0.32 level.
The cryptocurrency community’s prediction is likely taking into account increased adoption of ADA, with South Korean cryptocurrency bank Delio set to list $ADA and launching a staking service for it.
The Cardano Foundation released the network’s on-chain stats for October recently, showing that native tokens on Cardano went up nearly 5% to 6.62 million, while Plutus scripts grew 4.59% to 3,535. Notably, the number of transactions conducted on Cardano surged 4.18% to 53.3 million, while smart contract transactions grew by over 2%.
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