Crypto News: It might be time to move your crypto offline

The crypto dominoes keep falling.

The ripple effects from FTX's epic collapse are spreading to firms across the industry. The latest casualty? Crypto lender BlockFi, which filed for bankruptcy on Monday.

Although that wasn't a huge surprise given BlockFi's close ties to Sam Bankman-Fried's empire, it underscores how FTX's woes have generated an existential crisis that's afflicting the crypto world as a whole, and online exchanges in particular.

In less than a month, the former anchor of the crypto world spiraled into bankruptcy, freezing customer assets and causing prices of cryptocurrencies across to the board to plunge.

Then came the contagion, which has trapped retail traders' crypto on several platforms. Lending firm Genesis has suspended redemptions, and Gemini Trust Co. is freezing withdrawals from its yield product. Bankrupt firm Voyager Digital, which Bankman-Fried was going to rescue, now faces an uncertain future. Even hedge funds, at least the ones with exposure to FTX, are taking a hit.

So what happens now?

Long, painful bankruptcy proceedings. Class-action lawsuits. Potentially, further drops in the value of digital coins.

And, while the Japanese subsidiary of FTX has a plan for clients to get their funds back, customers of struggling platforms in other parts of the world — including the US — face months, or even years, of uncertainty as insolvency proceedings grind their way through the courts.

For those who still have money in crypto, financial advisers say now's the time to take stock and figure out your goals.

Jim Crider, a financial planner with Intentional Living FP in Texas, recommends considering why you initially bought crypto tokens.

"If you're invested in something that doesn't make sense, it's important to not allow sunk-cost fallacy to keep you in a poor investment," he said.

For those planning to continue investing in crypto, moving to cold storage — a digital wallet on a platform that's not connected to the internet — might be safer than keeping your coins in online exchanges, according to Noah Damsky, a financial planner at Marina Wealth Advisors in Los Angeles.

"While cold storage is not as convenient in some ways, it can be an option to insulate against some risks we've seen with companies such as FTX," he said. That's because it gives users self-custody of their coins, protecting them from third-party risks.

Don't have a crypto wallet yet? Well, Christmas is just around the corner. — Claire Ballentine

Send us questions about your own financial dilemmas to bbgwealth@bloomberg.net or fill out this form.

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For crypto traders, the latest bad news is BlockFi's bankruptcy.

In Bloomberg Opinion this week, Jonathan Levin says rising inventory could be a problem for the housing market:

Every year, the inventory-to-sales ratio spikes in January and February as transactions crater and the first new listings start to come online in anticipation of the spring open house season, which can set bad things in motion in times of stress. The last two years have experienced unusually muted spikes in the ratio, but that won't repeat again this winter. If you zoom in, it's already clear that the number of months of supply has been climbing in a seasonally unusual manner. The trend line will start to look concerning if it breaks through seasonal norms from 2018 and 2019 in the months ahead.
Read his full argument here.

What are the best ways to save money on flights for the holidays?

When you search for a roundtrip flight, don't forget to always take an extra 10 seconds and see if it's cheaper booking as two one-ways. This trick works sometimes because Delta might have the cheapest fare on the way out, while United might have the cheapest fare on the way back. But if you search only for roundtrip flights, the results will all have you traveling on the same airline. Oftentimes, airlines also have a 21-day advance purchase requirement, which means a certain fare is only available for up to 21 days prior to purchase. On day 20, that fare disappears and a new higher fare replaces it. So if there's a flight you're eyeing, circle 21 days before travel as the absolute final deadline to book. — Katy Nastro, spokesperson for Scott's Cheap Flights

Send us questions about your own financial dilemmas to bbgwealth@bloomberg.net or fill out this form.