FTX Melts Down, Crypto Market in Fear of Massive Contagion: This Week’s Recap
The past seven days were undoubtedly the most emotional, unexpected, and for many – devastating in a long time. One of the world’s leading cryptocurrency exchanges – FTX – filed for a voluntary Chapter 11 Bankruptcy with the US after failing to honor customer withdrawals and revealing a multi-billion liquidity hole.
It’s not particularly clear how it all went down and when exactly FTX started having issues due to the complete lack of transparency on behalf of now-former CEO Sam Bankman-Fried. There’s also not a lot of information on how much money the exchange has been funneling to SBF-owned trading firm Alameda Research, which is also part of the bankruptcy proceedings.
One thing is certain, though – the exchange has left thousands, if not millions, of people without access to their crypto investments, and it remains unclear if and when they could get any of it back.
In a clear blow to the industry’s integrity, many participants are in disbelief, predicting even tougher times ahead as contagion will start spreading in terms of valuation also in terms of regulation.
It’s worth noting that Binance signed an LOI to acquire FTX in full but pulled out of the deal after conducting due diligence. CZ said that the hole in the exchange’s book is too considerable to move forward.
Surely, more information and details will be shared as the bankruptcy procedure starts and advances with the relevant authorities. Meanwhile, SBF has resigned as CEO.
Expectedly, the market didn’t take the news well. At the time of this writing, BTC’s price is trading at $16.7K, down 17% for the week. Ethereum is down 19%, BNB – 15%, XRP – 18%, DOGE – 32%, DOT – 13%, SOL – 46%, and so forth.
The total cryptocurrency market capitalization was reduced to $880 billion, down $160B in seven days. Moreover, the FTX Bankruptcy procedure also includes approximately 130 entities that the company was associated with and the fear of contagion for the industry is peaking.
Market Data
Market Cap: $881B | 24H Vol: 110B | BTC Dominance: 36.4%
BTC: $16,731 (-17%) | ETH: $1,260 (-19%) | BNB: $284 (-15%)
This Week’s Crypto Headlines You Can’t Miss
FTX and Alameda File for Bankruptcy, SBF Resigns as CEO. One of the world’s leading and most popular cryptocurrency exchanges – FTX – has melted down. The company, alongside 130 of its affiliates, filed for voluntary Chapter 11 bankruptcy with the US authorities.
Binance-FTX Botched Acquisition: A Timeline of High-Profile Bailout That Never Happened. After taking a look at FTX’s documents, Binance decided that it won’t go through with acquiring the company. Here’s a timeline of how everything went down.
From Tom Brady and Steph Curry to BlackRock – Some of the FTX Investors and Partners. FTX had a very long list of investors, including some funds managed by the world’s largest asset manager – BlackRock. The company had also managed to attract a ton of celebrities on board.
JPMorgan Thinks Bitcoin Could Plunge to $13K Following the FTX Crisis. JP Morgan is of the opinion that Bitcoin’s price could plunge to $13K following the crisis with FTX. The asset already dipped towards $15K earlier in the week.
Canada’s Teacher’s Pension Fund Faces Investment Issue in FTX’s Liquidity Crunch. Canada’s Teacher’s Pension Fund is also amongst the entities that lost in the collapse of FTX. The fund invested an undisclosed amount in the company during a $420 million funding round last October.
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