Bitcoin Loses 20% on FTX Exchange Collapse, FTT, TWT, AR, Nov 14
BTC shook after a liquidity crisis on popular exchange. FTT crashes out of the top 100 coins. TWT wins when investors flee exchanges.
Bitcoin lost 20% of its value this week, sinking the cryptocurrency market after a liquidity crisis on the popular FTX exchange. Sam Bankman-Fried’s company ran into trouble and rival Binance offered to buy them out.
That deal fell apart after Binance conducted due diligence and CEO Changpeng Zhao said that buying the exchange was “not a win for us”.
In a further tweet, “CZ” said: ”Two big lessons: 1: Never use a token you’ve created as collateral. 2: Don’t borrow if you run a crypto business. Don’t use capital “efficiently”. Has a large reserve. Binance has never used BNB as collateral and we have never taken on debt.”
The drama started with a November 2nd Coindesk headline about FTX sister company Alameda Research. That was followed by the news that Binance was offloading all of its FTT holdings.
Bankman-Fried tweeted on November 7 that “assets were fine,” but that was quickly followed a day later with news that Binance would acquire its smaller rival and conduct the fateful due diligence.
Bitcoin price hit a low near 15,500 in the week and has since bounced to $17,000. The key resistance is $20k again, but there could be selling pressure ahead of that and there is the threat of a forced sale.
The price of FTT collapsed this week with the exchange token caught in the mismanagement of Bankman—Fried.
FTX said it would file for bankruptcy protection for FTX.com, FTX US and Bankman-Fried’s proprietary trading company Alameda Research, along with other affiliates, and the CEO has now resigned.
The collapse of the stock exchange was a major fall from grace for the founder who lost his entire $15.2 billion fortune in a matter of days. The firm’s assets were also seized in the Bahamas and they faced criminal proceedings. The Chapter 11 filing was followed by the $600 chop of the stock late Friday. FTX later confirmed the hack on its official Telegram channel, instructing users not to install any new upgrades and to delete all their FTX apps.
“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Do not access FTX website as it may download trojans,” said an admin.
On Twitter, members of the crypto community quickly began speculating that the outflows could have been orchestrated by a member of Bankman-Fried’s inner circle, noting that the simultaneous and sophisticated hacks of FTX and FTX US indicate a potential inside job. Twitter user ZachXBT tweeted on Friday that “several former FTX employees confirmed to me that they do not recognize these transfers.”
The Binance CEO said on Monday that regulatory scrutiny will be a good thing:
Much of the consumer confidence has been shaken. We have been set back a few years. We have just seen another very big player go down. Regulators will rightfully scrutinize this industry much, much harder, which is probably a good thing to be honest.
The price of FTT was trading at $1.29 on Monday after a sharp drop over the past week.
Trust Wallet Token was the biggest gainer this week with a 40% gain as investors feared for their cryptocurrency holdings on exchanges. A tweet by Elon Musk urged investors to put their coins in cold storage which could even affect other exchanges.
This trend is likely to continue and see investors putting a large portion of their portfolios into cold wallets or hardware wallets. Musk said of the meeting with Bankman-Fried ahead of the Twitter deal:
“Then I was like, man, everybody including big investment banks — everybody was talking about him like he’s walking on water and has a zillion dollars. And that wasn’t my impression … that guy is just — there’s something wrong, and that does he not have capital, and he will not come through. That was my prediction”.
I want to confirm that if you have crypto, you should have it in a directly accessible cold wallet. Not in an exchange.
“I think there’s probably a future for Bitcoin, Ethereum and DOGE. I can’t really speak to the others. But if you have one of those three in a cold wallet, and not an exchange, I think it works well,” he added. to.
Trust Wallet Token is the original coin of the “most trusted and secure crypto wallet”. Investors can use the wallet to buy, store, collect NFTs, exchange and earn cryptocurrency and it has reported 25 million users.
TWT traded at an all-time high of $2.40 and has a market cap of nearly $1 billion to rank 43rd on the list of the largest crypto projects.
Disclaimer: the information herein is provided without regard to your personal circumstances and should therefore not be construed as financial advice, investment recommendation or an offer for, or solicitation of, transactions in cryptocurrencies.