Another major downturn has been caused by the collapse of cryptocurrency exchange FTX, which occurred on November 8.
According to data from, Bitcoin has fallen 11.6% while Ethereum has experienced a collapse of 15% CoinGecko.
While FTX native token FTT has fallen 71.6%, CoinGecko showed, and the firm’s net crypto asset holdings have plunged 83% in just the past two days.
Yahoo Finance and Coinmarketcap charts show that total market capitalization has declined by more 11%, from $1.03 Trillion to $915 Billion.
Binance’s abrupt acquisition of FTX by Binance was the catalyst for the cryptocurrency market slump. This sudden purchase came after months of tensions between these two crypto exchanges.
Binance was the first investor who funded FTX, which is the world’s largest crypto exchange.
Changpeng Zhao (CZ), Binance CEO, tweeted Tuesday: “this afternoon FTX asked us for our assistance.” There is a serious liquidity crunch.”
“To protect users, I signed a non-binding agreement [letter of intent]We intend to acquire http://FTX.com in its entirety and cover the liquidity crunch. We will conduct a complete [due diligence] He said, “In the coming days.”
Sam Bankman-Fried was the CEO of FTX. He had bought up struggling crypto companies due to a credit crunch triggered by the sudden collapse in cryptocurrencies Luna, UST, or TerraUSD.
However, FTX is experiencing liquidity problems, which could lead to a need for cryptos to be sold in order attract finance.
Analysts state that the merger of the two crypto exchanges could lead to even more business competition for crypto firms at a moment when trading volumes have dropped dramatically.
Nomics data has shown that global crypto trading volumes in 2022 fell by 21%, to $86 trillion across all exchanges. Binance accounted in 21.7% for the global crypto trading volume. FTX had a 3.96% portion.
Binance and FTX are not the only rivals in crypto trading. Coinbase Global’s shares closed 11% lower Tuesday at $54.50 and $50.83, respectively.
Robinhood, where Bankman-Fried owns a 7.6% stake in the company, fell 19% Tuesday, their steepest drop since August 2021.
Binance’s principal competitor would be eliminated, and Binance could gain a US presence.
The merger could take some time as Bankman-Fried is currently testifying before Congress. Binance, however, has reportedly been subject to probes by the US Securities and Exchange Commission and the UK Financial Conduct Authority.
CZ had sold FTT for $529 million on November 6, in response to “recent revelations” that were made. He didn’t provide any clarification on the sale.
FTX saw an 83% drop in net crypto assets holdings following the event. This was in addition to a dip of 93% in stablecoin reserves over the past two weeks. There were also related withdrawals to close to zero.
A recent report from Reuters claims that FTX received $6 billion in withdrawals within the 72 hours preceding Tuesday morning. FTX is now in the midst of a $6 billion withdrawals. lost an estimated $14.6 billion dollars – nearly 94% of its total wealth, according to the Bloomberg Billionaire Index.
“On average days, we have tens or millions of dollars of net inflows/outflows. Things were pretty average up until the weekend,” Bankman-Fried said in a Tuesday morning message to staff.
Investors have also been affected by the fall of FTX. Sequoia, a venture capital firm, had contributed $420 million to a round of funding that increased the crypto exchange’s value to $25 billion by October 2021.
FTX’s market value increased to $32Billion in January 2022, following a $400M investment made by a consortium with Paradigm.