Bitcoin Sees A Big Loss As FTX Deal Fails

Stack of Bitcoin tokens

For the second day in a row, Bitcoin (BTC) and Ethereum (ETH) are down roughly 12% after Binance declared that it will no longer seek to purchase its competitor FTX.

Many attribute this most recent downfall to the recent dispute between Binance and FTX.

Earlier this week, Binance, the world’s largest cryptocurrency exchange, sold its FTT tokens, a native FTX currency used for price mediation on the exchange.

The decision came after a report highlighted the company’s potential insolvency issues.

The story appeared to be reaching a conclusion after CZ announced that Binance would be acquiring FTX.

However, after doing due diligence, the world’s largest exchange revealed on social media that it had terminated the transaction.

“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.” Binance officially announced this on Twitter.

According to a Coindesk study, tokens FTT account for more than 33% of Alameda Research’s US$ 14,6 billion fortune in cryptocurrency trading — which also belongs to Sam Bankman-Fried, the head of FTX.

Alameda also had a passive US$ 8 billion, with US$ 7,4 billion of it in investments. As a result, if a severe failure occurs in the FTT, the company may be unable to pay its debt.

As a result, the president of Binance, Changpeng Zhao, said on Twitter he was going to sell his whole position in FTT tokens due to concerns about FTX’s insolvency.

The cryptocurrency lost more than 80% of its value due to the liquidation, and Zhao expressed interest in acquiring a competitor exchange, but eventually backed out from the agreement.

Bitcoin On The Downfall

According to Coinmarketcap data, bitcoin fell over 13.5% in 24 hours, currently trading at around $15,800.

Meanwhile, ether, the digital currency of the Ethereum network, fell 12.8% to US$ 1,146.

With the drop, bitcoin is now trading at its lowest price since July 7th, 2020, when it reached $14,833.

In recent weeks, bitcoin appeared to be on its path to recovery. Although slowly, the cryptocurrency appeared to be on its way to the $22 million mark.

However, after this new cryptocurrency-related crisis ensued, bitcoin has already lost 74% of its value this year.

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