After Binance’s decision to liquidate FTX holdings, Bitcoin – along with the majority of the world’s top ten cryptocurrencies – went on a steep decrease in value in the past 48 hours.
The decline is a reaction to the announcement made on Sunday by the CEO of the world’s largest cryptocurrency exchange. On this occasion, Cahngpeng Zhao stated that Binance would start liquidating FTX’s native token, FTT.
The decision affected the prices of Bitcoin, making the leading cryptocurrency drop to $18,282 – its lowest price in over two and a half years.
This news is certainly disappointing for cryptocurrency investors.
Bitcoin was going through one of its best moments over 2022’s second semester. BTC was able to withstand the recent pressure from the most recent raise in interest rates from the Federal Reserve.
At the time, the currency looked to be on its way to reaching the $22,000 mark.
How the FTX/Binance Dispute Initiated
Everything started after a proposal from FTX’s CEO Sam Bankman-Fried about imposing cryptocurrency regulation. The market’s main criticism was on the delay in relation to decentralized financial protocols, or DeFis.
Despite Bankman-Fried’s promise to review the regulation proposals, Binance, under the leadership of its CEO, Changpeng Zhao, went on ahead and liquidated close to $2 billion in tokens — both FTT and Binance stablecoins, the BinanceUSD.
Midterms and CPI Index Could Also Affect Bitcoin This Week
After the major negative price movement following the impasse between Binance and FTX – this week has the potential of once again affecting Bitcoin’s price.
On Tuesday, the United States will go through an election, which will renovate the American congress for 2023.
The American elections generally hold a lot of weight for investments in risky assets like stock and cryptocurrency assets.
This election will prove to be significantly more important, due to the fact that the U.S. government will likely debate and propose cryptocurrency legislation in 2023.
Depending on the general profile of the elected officials, the results could positively, or negatively affect Bitcoin.
In addition to the midterms, this week will also feature October’s Consumer Price Index release.
The CPI was closely connected to bitcoin prices during 2022. This phenomenon can be explained by the US Federal Reserve’s strict regulations about interest rate rises, and how this affects digital assets.
Many short-term investors pay careful attention to the CPI because it may be used as a hedge against inflation.
