The cryptocurrency market is still in trouble. Despite a drop in the US inflation rate, investors remained concerned about the industry’s stability and the financial health of the leading exchange FTX.
As a result, digital assets such as Bitcoin and altcoins suffered greater price losses.
A previous rise in cryptocurrency prices coincided with the release of CPI statistics, which revealed a smaller-than-expected rise. In a time of great concern, this gave investors hope that price pressures might ease. This rise, however, was short-lived as market contagion took its toll.
Following the publication of a lower-than-expected inflation rate for October in the United States, other financial assets recovered, assisting the pound, Euro, and naira to soar (black market rate) on Thursday.
Bitcoin is still more than 70% below its all-time high, set exactly one year ago.
More crypto liquidations: In the meantime, 137,650 traders liquidated $241.37 million in crypto assets. Binance received the largest single liquidation order, worth $3.76 million in BTCUSDT.
A lot has happened in the world of cryptocurrencies in the last few days, which has, as expected, impacted pricing. For example, the price of Bitcoin soared to a multi-week high of nearly $21.5K over the weekend.
FTX’s collapse
The news of FTX’s failure has demoralized a lot of investors. Sam Bankman-Fried, the creator of the well-known exchange and a former “white knight” of the cryptocurrency sector, has now lost more than 94% of his wealth in a single day.
Due to various anomalies with the balance sheets of FTX and Alameda, Binance laid out plans to sell up its entire FTT stockpile as everything appeared to be going according to plan.
Consequently, the domino started to fall. Bitcoin nearly instantly fell to below $20,000, but that was only the beginning.
Similar, if not greater, pain than bitcoin was felt by other cryptos during the past few days.
More cryptos drop
Within this time, the price of Ethereum dropped from over $1,600 to roughly $1,100. The second-largest cryptocurrency is still down by double digits for the week, even though it is now trading above $1,200.
Another significant loser from the current shambles is Binance Coin. Following news that Binance will buy FTX, BNB soared to $400 before falling immediately after. BNB was further driven south to its current level by Binance’s statement that it would not buy the SBF-led exchange.
FTX’s apology
Sam Bankman-Fried, the Chief Executive Officer of FTX, apologized to investors and the cryptocurrency community on Thursday for his mistakes during the liquidity crisis.
In his apology tweets, Bankman-Fried stated that he is currently discussing raising cash that will “first be used to do right by the clients.”
The Bahamas-based crypto exchange has stopped accepting withdrawals and is currently the focus of state and federal investigations. Sam Bankman-Fried, the founder of FTX, claims that FTX US is fine, but the business said on Thursday that it might stop trading soon and recommended consumers stop making deposits.
Binance’s disappointment
Investors expected Binance to save the day through a potential bailout as this week’s events unfolded, but the company’s CEO revealed late on Wednesday that the plan had been scrapped.
