A violent wave of losses erupted in the digital currency market during trading today, Tuesday, amid news of a possible new bankruptcy that may ravage the crypto market.
Leaks have emerged about the potential bankruptcy of Alameda Research, with a subsidiary of FTX, FTT and SOL for sale.
Meanwhile, bitcoin’s price has plunged to its lowest level in two weeks, as news of the bankruptcy drained the bitcoin price amid what analysts described as “mass withdrawals signaling evaporation of liquidity”.
The data showed that the price of Bitcoin showed that BTC/USD fell to $19,351 to its lowest level since October 25 to shed the $20,000 levels.
The current wave of declines hit the prices of the 100 largest digital currencies by market value.
Ethereum is down 7%, Bitcoin is down 5%, Binance Coin is down 3%, Ripple is down 7%, Dogecoin is down 13%, Cardano is down 6%, Solana is down 11%, Sheba Ino 8 and Avalanche is down 9%.
Meanwhile, as the rumor of bankruptcy spread, cryptocurrencies lost more than $100 billion within a few hours as fears of a new Selios-style bankruptcy spread.
The market value of digital currencies decreased from levels of 1.06 trillion dollars below the levels of 960 trillion dollars, to decline by more than 100 billion dollars.
In a tweet later on November 7, the Binance founder defended the decision to withdraw from the FTX exchange, while FTX CEO Sam Bankman-Fried tried to reassure the markets that his trading platform was able to deliver.
“There have been questions about a significant deposit ($580 million) from FTT to Binance, and we have been transparent about the fact that we are closing our FTT position,” said FTX CEO Sam Bankman-Fried.
Meanwhile, the allure of Bankman-Fried seemed to fall on deaf ears.. Overnight, FTX saw a surge in withdrawals, with resources monitored even displaying negative BTC balances for exchange wallets.
Jack Newold, founder of the Crypto Pragmatist newsletter, FTX, the No. 2 cryptocurrency trading platform, began his Twitter investigation by saying:
“Pushed to the brink by the debt crisis and an announcement from its No. 1 competitor, it has bled $1 billion off the platform in the past few days.”
In another of the many reactions to the ongoing turmoil, Dylan Leclerc, chief analyst at UTXO Management, argued that while it may not be over financially for FTX, the transparency of its operations has been a cause for concern.
A portion of the Twitter comments stated: “I don’t think FTX is likely to be insolvent, but I think Alameda’s concerns are significant, if nothing else.”
cz . claim
In his statement on the matter, Shaw claimed that sales will be conducted in a way that affects the market as little as possible. The CEO of Binance has also stated that they have no intention of harming a rival cryptocurrency exchange with their decision.
While these developments were taking place, Carolyn Ellison, CEO of Alameda Research, made an offer of $22 per token to purchase FTT tokens from Binance.
The move is interpreted as making such an offer because the company does not want the price of the FTT token to drop below $22.
In the midst of this development over the weekend, many commentators shared their concerns about FTX. Some crypto commentators, who believe that a major cryptocurrency exchange is at risk of bankruptcy, believe that FTT’s recent transfer from Binance fueled the crisis.
Sam Pinkman-Fried, CEO of FTX, said in a statement on Twitter that FTX and its subsidiaries are subject to a high level of oversight and have a strong financial structure. Bankman-Fried confirmed that shootings on the platform are continuing smoothly, and told FTX users there was nothing to worry about.
Reports after the $584 million FTT token was transferred from Binance also showed some big exits.
Among them, $109.8 million in crypto funds were transferred from FTX to the Nexo platform. On the other hand, Jump Trading has withdrawn 40.4 million US dollars from the FTX exchange.
While these developments are taking place, FTT token is down more than 10% to $21.4, while the downtrend continues in cryptocurrencies, FTT, which is down 15% in the last week, was changing at $22.
The article does not express a recommendation or nomination, but merely a monitoring of market fluctuations, as trading in digital currencies involves high risks, including the risk of losing some or all of the investment amount, knowing that it is not completely subject to the authorities and markets.