Crypto

As Binance Pulls Out of FTX Deal, Crypto Market Goes Through Turmoil

It was a topsy-turvy race for FTX. First, Binance announced the acquisition of FTX on November 9, 2022, to exit later. Since then, the value of Bitcoin has fallen by more than 10% to $16,000 (Rs 14 lakh), its lowest level since November 2020. Additionally, the value of altcoins such as Dogecoin, Cardano, Solana and XRP has also fallen. decreased by more than 10%. “The FTX collapse wiped out over $180 billion from the crypto market as digital assets across the board are under tremendous pressure. Ethereum is trading at $1,170.12, down more by 10% in the last 24 hours. Historical data shows that Ethereum is following the trajectory of Bitcoin,” Shivam Thakral, CEO of BuyUcoin, a crypto exchange, told FE Blockchain.

Changpeng Zhao, co-founder and CEO of Binance, on the collapse of the deal, said, “Following the company’s due diligence, as well as the latest news reports regarding mismanaged client funds and the alleged investigations by US agencies, we have decided that we will not pursue the potential acquisition of FTX.com.

It should also be noted that the overall market capitalization has fallen below $1 trillion, thus reaching a market below $900 billion for the first time since 2021. According to industry experts, the fall of FTX may lead to a drying up of its volume. “Users who are in the lending and borrowing business of FTT will go through a liquidity crisis due to the loss of funds. This is all due to the FTX-Binance drama,” said COO Punit Agarwal ( CTO) and founder of KoinX, a cryptocurrency exchange.

As of November 13, 2022, Bitcoin (at the time of writing this report), was trading at $16,869 (Rs 14 lakh). Ethereum fell almost 7% in a single day and traded below $1200. (Rs one lakh). According to Rajagopal Menon, VP of WazirX, a crypto exchange company, this is a worrying development for the industry. “The general feeling was that we had hit rock bottom and the only way was up. Things could get worse in terms of volatility before they get better. In the long run, there will be pressure for more transparency in the form of proof of reserves,” he added.

Meanwhile, other cryptocurrencies also declined significantly and posted double-digit losses, including Dogecoin, Ripple, Solana, and Cardano. FTT, the native token of FTX, fell nearly 75% in a single day. “Any crypto-asset company that has taken advantage of its own balance sheet should be on the back burner. If your clients’ assets aren’t covered, or better yet, over-secured, you’re one rumor away from a catastrophic sale,” warned Nikhil Khure, founder and CEO of Finarkein Analytics, a data analytics platform.

Read also : Binance shuts down FTT deposits, says CEO

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