Bitcoin fell back below $16,000 on Thursday, November 10. A drastic fall caused by the surprise announcement of Binance which finally refused at the last moment to buy its rival FTX, which is currently going through a particularly dark period. We explain everything you need to know about this case that has been shaking the cryptocurrency market for several days.
The cryptocurrency market is once again experiencing a hectic week, to say the least. The fault of FTX, a famous trading platform, and its setbacks following an article by CoinDesk. Today, after yet another panic caused by a surprise announcement from Binance, the entire cryptocurrency market is at its worst. Bitcoin fell back below $16,000, a historic drop for the currency.
And for good reason: this Thursday, November 10, Binance announced via a press release on Twitter to abandon the takeover of FTX, promised earlier in the week. “Following the due diligence of the company, as well as the latest information regarding mismanaged client funds and alleged investigations by US agencies, we have decided not to pursue the potential acquisition of FTX”writes the firm.
FTX on the brink of bankruptcy, what happened?
FTX’s woes began last November 2, when CoinDesk’s incendiary article was published. In it, we learn that Alameda’s Reasearch, a sister company of FTX specialized in trading, holds $ 14.6 billion in assets, most of which is made up of “unlocked” FTT, FTX’s in-house token. , to the tune of $3.66 billion, leading to a potential conflict of interest in the market.
Shortly after these revelations, Changpeng Zhao, CEO of Binance, the world’s leading cryptocurrency exchange, announced the sale of all of its own FTTs. This statement triggers panic among investors, who in turn get rid of all their assets related to FTX. Sam Bankman-Fried, CEO of FTX, then saw his fortune melt from 14.6 billion dollars to 991 million dollars.
Therefore, the entire cryptocurrency market is in free fall. Bitcoin and Ethereum are both plunging to their lowest levels in months, even as 2022 has been a particularly difficult year for the sector. Finally, a glimmer of hope appears for FTX and its users when Changpeng Zhao sends FTX a letter of intent to take over… before blowing everything up today.
“At first our hope was to be able to help FTX customers provide liquidity, but the issues are beyond our control or our ability to help”explained the company, before adding that “press revelations regarding mismanagement of client funds and alleged investigations by US agencies” undermined his will to continue the process.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
Following Binance’s withdrawal, Sam Bankman-Fried is now looking to raise $8 billion in cash to fund mass withdrawals from FTX users. According to Bloomberg, the company, which was still worth tens of billions of dollars at the start of the year, now risks bankruptcy if this fundraising fails.
Catastrophe for Bitcoin falling below $16,000
As usual, the response from the cryptocurrency market was quick. Bitcoin in particular is going through its darkest hours for two years, since it has just fallen below the $16,000 mark. Just a year ago, the currency reached its historic peak of $69,000, before being battered by the crash that has been raging since last May. According to the investment bank JPMorgan, the currency should continue to fall before stabilizing at around 13,000 dollars.
Related: Bitcoin Could Hit $300,000 By 2028, Experts Still Believe
As for Ether, it is now around 1100 dollars, which has lost more than 20% of its value in just a few days. All this of course without counting the projects directly supported by FTX, in particular Solana, which has seen its share price cut by three since the start of the affair. Overall, the market fell below $900 billion.
