Cryptocurrency Meltdown Pauses After FTX and Alameda Implosion


Bitcoin (BTC), Solana (SOL), and FTX (FTT) Prices, Charts, and Analysis:

  • Binance backs out of a possible FTX bailout after trying on the books.
  • FTX and Alameda are beneath heavy regulatory scrutiny.
  • Liquidity issues proceed to roil the market.

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This week’s collapse of cryptocurrency alternate FTX, and sister firm buying and selling home Alameda, despatched shockwaves by way of the crypto market and left traders and merchants alike nursing heavy losses on their digital cash and tokens. While the market continues to concern potential knock-on liquidity issues, the cryptocurrency market will stay beneath promoting stress and additional losses might accrue.

This week’s liquidity crunch at FTX, who it appears had been lending buyer’s deposits to Alameda in an try and stem heavy buying and selling losses, left FTX clients unable to withdraw their funds from the alternate, with fears now that lots of them is not going to get any of their money again. Another cryptocurrency alternate, Binance, mooted shopping for FTX’s non-US unit however shortly backed away from any potential bailout after FTX’s books.

The week began with giant withdrawals from FTX over the weekend, sparking a Twitter row between FTX proprietor Sam Bankman-Fried and Binance proprietor and CEO Changpeng Zhao (CZ).

Bitcoin (BTC) Slumps as FTX and Binance Spat Hits Market Sentiment

The state of affairs then took a flip for the more severe after Binance agreed to accumulate FTX, solely to tug out of the deal after FTX’s numbers.

Bitcoin Agrees to Acquire FTX, Bailing Out its Rival to Plug a Liquidity Hole

With the state of affairs turning more and more bitter the cryptocurrency market bought off additional, sending cash and tokens tumbling to multi-month lows and worse. The proprietor of FTX and Alameda, despatched out a sequence of tweets on Thursday admitting that he had ‘f*cked up’ and ‘should have done better’. In his mea culpa, Sam Bankman-Fried admitted ‘poor internal labelling of bank-related accounts’ and liquidity points.

It then seems, in accordance with a narrative in The Wall Street Journal that FTX had been lending buyer deposits to its sister agency Alameda Research to prop up its ailing buying and selling enterprise. According to the article, FTX lent about USD10 billion to Alameda. On Thursday, Sam Bankman-Fried mentioned that Alameda was winding down its buying and selling operation.

One article written round every week in the past by CoinDesk, additionally confirmed that a big portion of Alameda’s steadiness sheet was made up of FTT tokens issued by FTX. As the worth of those tokens collapsed, Alameda’s destiny was sealed.

The heavy losses concerned within the FTX/Alameda collapse have prompted swift actions by a spread of regulatory our bodies. The Securities Commission of Bermuda has frozen the belongings of the Bahamian subsidiary of FTX, whereas the SEC and the Justice Department are actually investigating FTX.

The FTX/Alameda collapse despatched cryptocurrency costs sharply decrease over the week with the market capitalization of the area falling by round 20%. The FTT token fell from the mid-$20s to a present degree of $3.49 over the previous seven days, wiping out billions of {dollars}….

FTT (FTX) Token Price Chart – November 11


….whereas Solana (SOL), certainly one of Alameda’s largest holdings, halved in worth over the week on investor fears that Alameda’s place might be dumped on the market. Solana traded as excessive as $260 one 12 months in the past.

Solana (SOL) Daily Price Chart – November 11, 2022


Bitcoin was not proof against the market sell-off and at one stage broke beneath $16k this week, its lowest degree in two years. The market has picked up marginally with BTC/USD now buying and selling round $17.4k.

Bitcoin (BTC/USD) Daily Price Chart – November 8, 2022


Chart through Buying and sellingView

What is your view on Bitcoin – bullish or bearish?? You can tell us through the shape on the finish of this piece or you’ll be able to contact the writer through Twitter @nickcawley1.

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