Bitcoin has collapsed by 77% due to the collapse of one of the world’s largest crypto exchanges

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bitcoin

At 3:00 p.m. on Thursday, November 10, bitcoin cost $16,600.

This is 77% less than its value exactly one year ago – $67,734 at the close on November 9 and almost $68,992 during trading on November 10, 2021. 

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Reuters writes about it.

Bitcoin has lost more and more value recently. Since mid-June, the range has been around $18,000-25,000; since mid-September, it has narrowed even further to $18,000-21,500. The collapse occurred in recent days after the largest crypto exchange Binance announced its intention to buy FTX (a top 5 ), which began to experience a liquidity crisis – customers began to leave it.

However, on Wednesday, Binance, after reviewing FTX’s reporting, abandoned the deal. “We originally hoped to support FTX customers by providing liquidity, but the situation is beyond our control and we are unable to help,” Binance said in a statement.

The “hole” in FTX’s finances is $8 billion, people familiar with the situation told The Wall Street Journal. According to them, the founder and general director of the exchange, Sam Bankman-Fried, informed investors on Wednesday that the mass requests of customers to withdraw funds provoked a liquidity crisis and the exchange needs anti-crisis financing. FTX hopes to raise $4 billion through an additional share issue, sources told the WSJ.

According to Bloomberg’s source, Bankman-Fried also said that if the money cannot be raised, the stock exchange is at risk of bankruptcy.

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On Thursday, FTX closed the ability to withdraw funds for customers. It was brought to the brink of collapse by Bankman-Fried’s attempts in recent months to save other crypto firms that were collapsing due to the collapse of the cryptocurrency market and the increase in interest rates by central banks, writes Reuters citing several people close to the founder of FTX. Several such deals have caused large losses.

“First, FTX rescues crumbling financial crypto-pyramids. Now FTX is collapsing on its own and is being saved by Binance. Who will save Binance when this poor house of cards collapses?” – writes economist Nouriel Roubini.

Bitcoin’s breakout from the range triggered by FTX issues suggests further downside is likely, he notes.

Background. We will remind you, the day before it became known that cryptocurrencies collapsed due to the news that Binance will buy the rival crypto exchange FTX.