The Crypto market remains in troubled waters. Despite a decrease in the U.S inflation rate, investors continued to worry about the stability of the industry and the financial health of leading crypto exchange FTX.
As a result, digital assets like Bitcoin and altcoins experienced more price losses.
A previous increase in cryptocurrency prices coincided with the release of CPI statistics, which revealed a lower-than-anticipated decrease. In a moment of great worry, this gave investors the optimism that price pressures may be easing. However, this increase was short-lived as market contagion took its toll.
Initial recovery: After the US published a lower-than-expected inflation rate for October, other financial assets recovered, helping the pound, Euro, and naira soar (black market rate) on Thursday.
Bitcoin is still more than 70% behind its record high, which it hit exactly one year ago.
More crypto liquidations: In the meantime, 137,650 traders liquidated their crypto assets valued at $241.37 million. The greatest single liquidation order, worth $3.76 million in BTCUSDT, took place on Binance.
In the past few days, a lot has transpired in the world of cryptocurrencies, which, as predicted, impacted pricing. For instance, over the weekend, the price of Bitcoin soared to a multi-week high of almost $21.5K.
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 decided to lay 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 tweets of apology, Bankman-Fried stated that he is currently in discussions to raise 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 the events of this week unfolded, but the company’s CEO revealed late on Wednesday that the plan had been scrapped.