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Crypto Crisis: Bitcoin Collapses By 17% and Sees No Hope

The crypto industry is plunged into a new crisis of confidence. 

As cryptocurrency prices began to stabilize, fresh drama derailed the sense of relief that was finally settling into the crypto market this year.

The consequences and implications of this drama are still far from being established as the shock is colossal. 

Sam Bankman-Fried, who emerged this summer as the savior of crypto firms on the verge of bankruptcy, agreed within 24 hours to sell his empire to his great rival Changpeng Zhao.

This empire is made up of the FTX.com exchange, two of whose ambassadors are sports stars Stephen Curry and Tom Brady. There is also the high frequency trading platform Alameda Research. Financial details of the transaction were not disclosed.

But this transaction which is more of a bailout as Zhao indicated that FTX and Alameda were on the verge of insolvency. 

“This afternoon, FTX asked for our help,” Zhao, co-Founder and CEO of Binance, wrote on November 8. “There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days,” he added.

If Bankman-Fried, which extended lines of credit to fintech BlockFi and took a stake in popular trading app Robinhood  (HOOD) – Get Free Report at the height of the credit crunch last summer, who is safe or immune to a liquidity crunch?

It is this question which was widely spread on November 9th. Investors seem to be wondering what corpses the crypto industry still has in its closets. Their defiance is materialized by the fall in the prices of cryptocurrencies. 

Risk of Contagion

The crypto market was down 12.3% in 24 hours. The market was now valued at $887 billion. It has thus fallen by more than $2.1 trillion compared to its record level of $3 trillion reached in November 2021. In one year, the situation has completely deteriorated.

The price of bitcoin (BTC) fell 16.6% to $17,188.00, according to data firm CoinGecko. The most popular cryptocurrency seems to be on the way to pushing new…


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