Bitcoin prices have had a turbulent week, falling sharply as markets reacted to the ongoing developments surrounding troubled FTX exchanges, but then recovered and managed to hold on to the bulk of their gains.
The world’s most prominent currency stood at $20,759.24 at approximately 9 a.m. EDT on Friday, November 4, CoinDesk data shows.
Later in the evening, it hit its high of the week, rising to more than $21,400, additional CoinDesk figures reveal.
Over the next few days, the digital asset encountered some volatility, falling to a two-year low of $15,625 on the 9th. CoinDesk reported,
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Over the next few days, bitcoin prices rallied, rising to more than $18,100 yesterday afternoon on CoinDesk, representing an increase of about 16% from intra-week lows near $15,600.
After the upward move, bitcoin fell back and approached $17,000 late last night and is trading at $17,228.50 around 9 EDT today.
FTX’s Ongoing Saga
Bitcoin prices saw these swings as market participants reacted to a series of developments involving FTX, with the Bahamas-based exchange’s uncertain situation appearing to change quite a bit in a short period of time.
Earlier this month, CoinDesk reported that Alameda Research, a trading firm founded by FTX founder Sam Bankman-Fried, held more than a third of its $14.6 billion worth of assets in either FTT, the native token of FTX, or “FTT security” .
This development helped raise concerns about the nature of the relationship between FTX and Alameda, its sister company.
Market participants responded, withdrawing roughly $6 billion worth of funds from the platform in a 72-hour window before the morning of Tuesday, Nov. 8, Reuters reported,
Bankman-Fried, along with other people he worked with, later began looking for an acquisition partner, reaching out to various parties, CoinDesk reported,
Changpeng “CZ” Zhao, founder and CEO of Binance, announced on Twitter the same day that Binance had signed a non-binding letter of intent with the exchange, stating that the purpose of this move was to “fully acquire FTX.com and help cover the liquidity crunch.”
But less than 48 hours into the due diligence process, around 4 p.m. EST on Nov. 9, Binance announced on Twitter that it would not buy FTX.
“As a result of the company’s due diligence, as well as recent news reports of mishandled client funds and alleged US agency investigations, we have decided not to pursue the potential acquisition of FTX.com,” a tweet posted by the Binance Twitter account listed,
After Binance went away, Reuters reported on Nov. 10 that FTX was seeking as much as $9.4 billion in financing, citing an anonymous source who claimed to have direct knowledge of the situation.
FTX files for bankruptcy
FTX Group, which includes FTX Trading Ltd. (FTX.com), Alameda Research and over 130 affiliated companies, announced today that they have filed for Chapter 11 bankruptcy protection, according to a corporate declaration posted on Twitter. Sam Bankman-Fried stepped down from his position as CEO, allowing John. J. Ray III to assume the top role.
Ray, a lawyer, served as chairman of Enron after the energy giant filed for bankruptcy, according to Chicago Tribune,
Previously, FTX had been valued at as much as $32 billion when it raised $400 million in a Series C funding round earlier this year, according to the company, CNBC reported,
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.