Bitcoin News

Bitcoin And Ether Both Fall To Year Lows

Wednesday morning trading in Asia saw Bitcoin drop to a one-year low of US$17,603, as investors became uneasy over Binance Global Inc.’s acquisition of the FTX exchange amid rumors that FTX, one of the most well-known cryptocurrency companies in the world, may have financial issues. In a widespread crypto market capitalization sell-off of the top 10, Ether also experienced a decline.

In the 24 hours, Bitcoin traded 10.2% lower at US$18,527. Following the announcement of the Binance acquisition, the benchmark cryptocurrency originally increased by 6%, but then declined due to worries over FTX’s balance sheet and possible contagion. According to CoinMarketCap, the price of ether fell by 15.2% to $1,330.

BNB, the native token of the Binance blockchain, also decreased in value, although its losses were less severe than those of the other top 10 cryptocurrencies, falling 3.3% to US$326.68.

One of the hardest hit was Solana, which fell by 19% to US$23.98, its lowest level for the year. Dogecoin fared even worse, falling by 21.7% to US$0.08.

Changpeng Zhao, the CEO of Binance, and Sam Bankman-Fried, the founder and CEO of FTX, announced the purchase overnight on Tuesday in the midst of a liquidity crisis at the company, with debt making up 54% of assets as of June 30. It also holds a majority of the company’s native token FTT, which raises the possibility of solvency problems given that the token dropped approximately 75% of its value until marginally gaining it back to $5.43.

According to Semafor, FTX was apparently looking for funding of up to US$6 billion to close the shortfall in its balance sheet.

The difficulties at FTX are raising worries of a wider liquidity crisis similar to the multibillion-dollar failure of the Terra/Luna stablecoin project in May of this year, which sent a number of crypto companies exposed to Terra into bankruptcy.

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