NEW YORK – Following the abrupt collapse of cryptocurrency exchange FTX Trading, which was compelled to sell itself to significantly bigger rival Binance, bitcoin fell to a two-year low and other digital assets sold off appearing as though Cryptocurrencies have fallen.
Bitcoin was trading around $17,645, and it fell overnight to its lowest since December 2020. Bitcoin reached an all-time high of $68,990 only a year ago. The price of Ethereum, the 2nd most frequently traded digital currency, fell 10%.
After undergoing the cryptocurrency equivalent of a bank run, FTX agreed to sell itself to Binance. Customers abandoned the exchange upon becoming particularly worried about FTX’s capital.
The abrupt sale came as a surprise to FTX CEO and founder Sam Bankman-Fried, who was heralded as a redeemer earlier this year when he assisted shore up several of crypto companies in financial distress. Could it be that cryptocurrencies have fallen?
Shareholdings of publicly listed companies with significant exposure to cryptocurrency were also down in early trading, following a sharp drop on Tuesday.
Robinhood Markets, an online trading platform, fell more than 6% after falling 19% on Tuesday. As of Tuesday, Bankman-holding Fried’s company, Emergent Fidelity Technology, owned 7.5% of Robinhood. In early trading, Coinbase, the second-largest crypto exchange after Binance, was down 6%.
FTX is the latest crypto company to face financial difficulties this year, as the value of crypto assets has plummeted. Other failures include Celsius, a bank-like firm that accepted crypto deposits in return for yield, and Three Arrows Capital, an Asia-based investment company.
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