![]() "If that happens, that could be bad news for the SOL token and possibly the industry at large. "Solana’s SOL token is currently taking one of the biggest hits because FTX is a big supporter of the layer one blockchain and holds significant amount of SOL on its balance sheet that it may have to sell to shore itself up in the current bank run," Marius Ciubotariu, a core contributor to solana-based Hubble Protocol and Kamino Finance, said via email. Solana, an ethereum rival that rocketed higher last year, has seen an outsized crash this week due to FTX's large solana holdings that some think the exchange may be forced to sell-off. This continues to unnerve traders in a space so driven by sentiment." "FTX and Alameda both scrambled to calm fears of another Three Arrows event after Binance chief CZ announced he would liquidate his FTT position. "Fears of contagion from the public spat between Binance and FTX have gripped the cryptocurrency market, resulting in an aggressive sell-off in FTX’s token, FTT, as well as solana SOL, which is one of the largest holdings of FTX's principal trading firm Alameda Research," crypto market analysts at the exchange Bitfinex wrote in an emailed comment. The drama between FTX and Binance have worried the bitcoin and crypto community who fear the clash will spillover to the wider market, as the collapse of hedge fund Three Arrows Capital did earlier this year in the aftermath other terra luna meltdown. could spread to the price of bitcoin, ethereum and other major cryptocurrencies. The price of FTX's FTT has dropped by almost 50% over the last week, sparking fears the situation. Sign up now for CryptoCodex -A free, daily newsletter for the crypto-curious MORE FROM FORBES 'I Overestimated'-Coinbase CEO Admits He Made A Big Mistake After $2 Trillion Bitcoin, Ethereum And Crypto Price Crash By Billy Bambrough Yesterday, Bankman-Fried posted to Twitter that "FTX is fine. FTX’s token FTT is down 30% at $15 at time of writing, but an announcement from FTX could result in a short squeeze"-where bets against an asset fail and result in a sudden price surge. ![]() The slump in the price of cryptocurrencies this time is the lowest since the beginning of 2021. The cause is the increasingly strong negative sentiment towards Bitcoin (BTC). "However, the silence from FTX CEO Sam Bankman-Fried is deafening, and causing further fear. JAKARTA Cryptocurrencies have fallen very sharply in recent days. "Whether this is just short-term liquidity issues due to the speed of withdrawals, or a more fundamental issue, is yet to be seen," Sotiriou added. Last week, Coindesk reported Alameda Research's balance sheet is loaded with FTX's FTT, making it highly illiquid. Over the weekend, Binance chief executive Changpeng "CZ" Zhao sent shockwaves through the bitcoin and crypto community when he announced Binance was liquidating its holdings of FTX's cryptocurrency FTT, a rival to Binance's own much larger BNB, citing "recent revelations" about FTX and Bankman-Fried's trading company Alameda Research. FTX did not immediately return a request for comment. The Block has reported FTX stopped processing withdrawal requests at around 6am ET, citing ethereum blockchain data. So, it's a phenomenon of the perceived demand and supply for the crypto as a valuable asset," said Subhash Chandra Garg, Former Finance Secretary."Mass panic around FTX’s solvency has caused investors to withdraw their assets from the platform hastily, which FTX have clearly struggled to deal with," Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, wrote in an emailed note. And that is what explains the crypto meltdown. ![]() Now, when this is being withdrawn when the interest rates are high, you realize that you have no big liquidity to buy assets. So, people thought of why not invest and make money. That liquidity has lifted many asset classes, and this has lifted most of the crypto world. Now, after the end, this was basically driven by very large liquidity sloshing around the world. So, without knowing or without actually understanding this, people were buying. ![]() "There is no inherent intrinsic way of measuring the real worth or value of the crypto and, therefore, cryptos were sort of getting priced depending upon the transient demand and supply for last many months. Here is what experts have to say about the reason behind falling crypto markets: Bitcoin is currently trading at $28,954, down from the highs of nearly $68,000. Consider this: Bitcoin year-to-date return has come down by 40 per cent while Ethereum is down by 50 per cent. Liquidity has dried up due to central banks hiking rates due to which trading activity in cryptos has fallen and so have their prices. ![]()
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