Panic flooded the cryptocurrency market and the bitcoin price plummeted by 12% in one day. Tuesday afternoonthe value of the most popular cryptocurrency was around 18,000 US dollars, the lowest figure in the last two years. The tremors arose from the liquidity crisis affecting FTXthe second largest trading platform in the world, harassed by massive withdrawals from users and Binance, its main rival and leader in that business.
The bull run hit bitcoin and major cryptocurrencies, which were publishing drops between 20 and 30%. Ethereum, the second best-known, has dropped more than 17.5% in the past 24 hours, according to the Coinmarketcap portal. The most affected is FTT (FTX Token), which belongs to FTX, which lost over 77% of its value in the last few hoursafter Binance CEO Changpeng Zhao announced the sale of all of its FTTs (for $ 500 million) due to a possible FTX insolvency.
Amid many intrigues and to cushion the worst market blow since mid-May 2021, Changpeng Zhao announced that it has reached an agreement for the purchase of FTX “to help cover a serious liquidity crisis “ and at the express request of the rival company. In fact, FTX CEO and founder Bankman-Fried expressed “a big thank you to” CZ “(Changpeng Zhao), Binance and all of our users” and said their teams “are working to eliminate the backlog.” , that is, to stop the race.
The entrepreneur, today in the sights of savers, has gone further. He said the deal “will eliminate liquidity problems; all activities will be covered from 1 to 1. This is one of the main reasons why we asked Binance to participate, “he said. However, Zhao did not conclude the deal.” To protect users, we sign a non-binding LOIwith plans to acquire FTX.com, “the businessman tweeted. LOI stands for Letter of Intent, which is a document that expresses the will to buy. And nothing more.
The story once again reveals the dense cloud that hovers over cryptocurrencies, which operate with very few regulations and without the controls of the traditional financial market. Suspicion is on the agenda. Without going any further, the Binance CEO had to clarify that the transaction (the sale of FTT) it was not “a conspiracy” against its competitor, which Bankman-Fried had suggested in a previous message. Apparently, what is observed two rival companies that are mutually supportivesomething quite unusual in any industry.
“What we are seeing is unfortunate for the entire ecosystem, with dubious and even immoral practices. Because not having users’ money is immorall “, told Clarín Matías Bari, CEO of Satoshi Tango, an Argentine cryptographic platform. Regarding the repercussions in the local market, Bari argues that” there was more movement than usual “and that” when the price (of bitcoin) moves violently, there is a bit of panic and many people go out to sell “.
At the end of this Tuesday, the volatility of the bitcoin price continued. It’s just about one of the 21,697 cryptocurrencies which are currently active, but is the most popular. Beyond the current crisis, the price of bitcoin was already very undervalued compared to its maximum value, when it hit $ 69,000 in November last year, exactly one year ago. She hasn’t stopped falling since thenalthough it managed to stabilize at around $ 20,000.
Many remember the previous shock, in May of this year, when Terra Luna, a stablecoin that promised 1: 1 parity with the dollar, collapsed. Then came the bad news, such as the surprising freeze on withdrawals imposed by Celsius Network, a company that granted loans in crypto. Many companies in the sector, including Argentina’s Buenbit and Mexico’s Bitso, have entered a period of adjustment due to a lack of funding and a loss of public confidence.
Source: Clarin
