Bitcoin prices fell 75% from highs. Cryptocurrency crash explained


Crypto assets that surged higher today continue to fall after reports said Binance has pulled out of the FTX deal. Bitcoin dipped below the $16,000 mark on Wednesday for the first time in two years and recently traded 3% higher at AT$16,351, while Ether rose 6.3% to $1,169. Bitcoin had hit an all-time high of nearly $69,000 a year ago.

Cryptos had already lost about $2 trillion in value before FTX’s problems emerged this week as central banks around the world raised interest rates to combat runaway inflation.

Shivam Thakral, CEO of BuyUcoin, said: “The FTX collapse has wiped out over $180 billion from the crypto market as digital assets across the board are under tremendous selling pressure. In the altcoin space, MATIC, AVAX and SOL saw double-digit declines in their value due to the broader sell-off across cryptoassets. According to the latest update, Binance has pulled out of the deal to acquire FTX, driving investors away from riskier assets.”

“Feedback from retail/institutional investors on withdrawals of their funds from FTX will play a crucial role in market recovery in the coming weeks,” he added.

FTX issues aside, global risk sentiment moderated slightly as the sell-off in cryptocurrencies continued, IFA Global said in a note.

“Binance has walked away from taking over FTX, and FTX has warned of bankruptcy without an $8 billion fund injection. A worse-than-expected showing by Republicans in the midterms is also hurting sentiment. Republicans are likely to take control of the House by a narrower margin than previously expected , and the Senate race is still open,” the forex advisory added.

The focus will be on the important US October CPI print today.

Among other asset classes, US stocks capped a three-day rally overnight with the S&P500 and Nasdaq ending down 2.1% and 2.5% respectively. Asian stocks are trading with a negative bias.

Crude oil prices have fallen for a fourth straight session on US recession worries and as China’s COVID concerns continue to grow. EIA data also showed a significant inventory build-up, and that is also weighing on crude oil. Gold is steady around $1,708 an ounce.

Meanwhile, Sequoia Capital wrote down the full value of its holdings in FTX, a signal that the venture capital firm sees no clear path to recouping its investment in the struggling cryptocurrency exchange. The VC firm invested about $214 million last year in FTX’s international and U.S. businesses, Sequoia told its investors on Wednesday. The write-down includes holdings of both and, a company spokeswoman said. (With agency input)

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