When I was contacted by one of the journalists at Bitcoin Magazine and asked what I felt the collapse of FTX meant for bitcoin, my initial reaction was to simply respond with "Tick-tock, next block."

After giving it some thought, though, I believe that a one-dimensional perspective on this issue is unlikely to do it justice.

My thoughts immediately went to an old Clint Eastwood movie called "The Good, the Bad, and the Ugly," which, conveniently enough, gives the ideal context for how I should think about this situation, which is still developing. I don't know why my mind went there so quickly, but it did.

The Positive
If there is anything positive that can be taken away from this situation, it should be the realization that centralized exchanges are not necessarily going to be on your side after all. When talking to (relatively) normal individuals about self-custody, it is certain that they will express the anxiety that they do not trust themselves to hold onto their own keys as the conversation comes to a close. According to what Caitlin Long says in the following paragraph, a large exchange might not be all that good at it either.

LinkedIn profile for Caitlin Long

It would appear that the general public is starting to understand. CoinTelegraph, a company that reports on the cryptocurrency market, stated two days ago that during the week leading up to the release of their report on November 13, 2022, $3 billion worth of bitcoin were removed from exchanges. If you are familiar with Bitcoin, you are probably aware that this is pretty important news and that it may be one of the best, if not the only beneficial outcome, from the entire fiasco that has been going on.

Price suppression through the use of "paper bitcoin" has been a topic of conversation in certain Bitcoin circles for quite some time. The greater the number of people who assume self-custody of their bitcoin, the greater the number of people who not only minimize the danger that their counterparty would lose their bitcoin but also reduce the capacity for exchanges to issue paper IOUs for bitcoin.

Warren Buffet once observed, "It's only when the tide goes out that you learn who's swimming nude." Self-custody gives you the opportunity to relax and watch the show without having to worry about anything.

The Negative
As a result of the closure of an offshore and uncontrolled cryptocurrency casino, legislators now have a unifying moment that they can use to their advantage in order to get some things done. Senator Elizabeth Warren is one of the people who has already called for "a significant crypto bill."

“Sen. Elizabeth Warren, a Democrat from Massachusetts, stated on Tuesday that a bill regulating digital currencies needs to be "complete," meaning that it must include protections for consumers, rules to prevent money laundering, and climate safeguards for crypto mining.

Senators Cynthia Lummis and Kirsten Gillibrand believe that the United States is at a regulatory disadvantage as a result of the lack of progress made on crypto legislation over the course of the past few years and months.

Ironically, one of the measures pertaining to cryptocurrencies that is currently being considered was drafted with the assistance of FTX.

"The bill — introduced by Senate Agriculture Chair Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.) — is facing scrutiny in the wake of the FTX collapse because the company was a major lobbying force behind the legislation. "The bill was introduced by Senate Agriculture Chair Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.)." According to Gary Gensler, the chair of the SEC, the idea has been described as having "too light-touch."

Despite the fact that U.S. regulation would provide some possibly much-needed clarification for institutions, a rushed package to meet an emerging crisis can result in an end product that is less than desirable for the markets in their whole. My expectation is that the legislative stalemate will assist to slow down the process, which will hopefully make it possible to draft legislation that is more thoughtfully deliberated on and carefully analyzed.

The Disgusting
At the time that this article was written, BBC News has claimed that FTX owes money to more than a million different businesses and individuals. As a result of the bankruptcy filing, it is now unknown who, if anyone, will be repaid, as well as the exact amount of money that will be returned to those individuals.

Even if it is simple to condemn cryptocurrency token gamblers and day traders for not gaining control of their coins, the situation is actually much more complicated than that. There are people in my extended family and circle of acquaintances who were worried about self custody and held their assets at BlockFi. Their cryptocurrency is currently stuck in a limbo state, and it is unknown whether or not they will ever be able to withdraw it.

The aftermath of FTX is still being uncovered, and I have no doubt that there will be a great deal more collateral harm brought to light over the next few weeks.

Maintain Your Humility While Accumulating Sats
I would like to encourage Bitcoin users to keep their humility despite the fact that it is simple and may even be therapeutic to slam on the unethical and maybe illegal activities that FTX and SBF are engaging in.

It is precisely circumstances such as these that give rise to the subsequent generation of self-custodial Bitcoin maxis. It is imperative that we make the most of this chance to take the lead and educate.

Just a few short months before I started writing for Bitcoin Magazine earlier this year, I nearly avoided losing everything in the catastrophic collapse of the Celsius exchange earlier this year. I have written about this experience in previous pieces. There are instances when we just are not aware of the things that we do not know. Assist them in seeing the truth.