Cryptocurrency prices continue to fall for a second day on Wednesday as investors continue to worry about the stability of the sector.
The financial health of major crypto exchange FTX is giving crypto investors cause for concern, even as major rival Binance plans a bailout deal.
Crypto giant Binance is signing a non-binding agreement on Tuesday to buy FTX international unit – with a US unit – to help cover “lack of funds” facing the rival exchange.
I suggest a deal between the two big rivals comes after a week of speculation about FTX’s financial condition that led to a $6 billion withdrawal within 72 hours of Tuesday’s deal.
It raises questions about how one of the world’s largest crypto exchanges sounds.
FTX and Binance no gree took di condition of dia agreement, and di market no sure weda or not di deal go happy.
Wetin make the price drop sharply?
Investors start to withdraw money on Sunday morning after several tweets from Binance CEO Changpeng Zhao, saying that I need to sell my stake in FTX native token, FTT due to some worrying revelation we are getting about the company.
FTX founder Sam Bankman-Fried responds to Zhao’s tweets saying that Binance dey “try to go after us with false rumors,” and insists that FTX “assets are fine.”
The revelation we Oga Zhao dey took about a report we tori pipo CoinDesk publishes in early November about Sam Bankman-Fried oda business, the trading company Alameda Research.
FTX and Alameda are not two separate companies.
You CoinDesk report say, a “private financial document” we see show says FTX native token dey for Alameda balance.
If the CoinDesk information is correct, we believe that about one-third of Alameda’s $14.6 billion in assets is in cryptocurrencies that FTX creates. It also means that the two companies are not independent of each company as they claim, and the two get shaky ground.
The following disclosure causes FTT plus oda crypto price to drop.
Bitcoin, the largest cryptocurrency by market capitalization, is down 5.3% in price in one day to $17,559 around 11:07 a.m., after a 10% drop on Tuesday, the worst day since mid-August. Ethereum, the second largest, continued its losses on Wednesday to hit its lowest since July.
What if the deal doesn’t go through?
“What if the deal doesn’t go through or (Binance CEO Changpeng Zhao) comes back and says I’m giving 10c on the dollar. That’s a blind spot where the market isn’t ready,” Scottie Siu, chief investment officer of Axion Global Asset Management for Hong Kong, tok.
There is confusion for FTX and the latest sign of trouble for the fast-moving world of cryptocurrencies.
Crypto prices are collapsing so far this year due to wahala as financial markets cause investors to dump riskier assets.
After growing strongly in 2020 and 2021, the bitcoin price does not fall around 62% in 2022.
Kami Zeng, head of research for Fore Elite Capital Management, a Hong Kong-based crypto fund manager, says dis na anoda “alarm warning” for the market, saying investors assume they need to be cautious for some time.
“… the whole can still looks like a dark hole. We’re not sure how contagious misappropriation is, but I think institutions need to show proof of reserves ASAP. Trust, no one steps up until then,” Zeng took .