FTX crashes and drives cryptos lower

Bitcoin on the edge of $16,000 has reached a new low, just a year after its all-time high, causing many investors to fear for the safety of the market in the face of the collapse of one of the biggest traders.

The bankruptcy of FTX has created a crisis of confidence in the crypto world that is reminiscent of the previous fall we had this same year due to situations such as the collapse of Luna, the crypto fund Three Arrows Capital or the Celsius platform.

Binance is the main cause

The crypto asset platform Binance announced on Tuesday its intention to acquire its competitor FTX.

This deal has been presented after the publication of FTX’s liquidity problems, which was unable to overcome a $6 billion disbursement wave in just 72 hours.

Further falls for cryptocurrencies

The announcement has once again sparked fears in the crypto world, which has taken many hits this year from the threat of recession.

• Bitcoin loses 8% of its value on Wednesday, in addition to the 14%, it lost on Tuesday, touching $16,000.

• Ethereum is down 15%, which, added to the 19% it plunged on Tuesday, leaves its value below $1,200.

• BNB is down more than 8%.

The crypto winter flares up just as it marks the first anniversary of bitcoin’s all-time highs.

Community fears

The fall of FTX recalls the fear that the liquidity problems and the lack of security in cryptocurrency trading are alerting the big players in this world and people feel the need to withdraw their funds thus causing massive falls.

The fear of bankruptcy of this platform has swept the market in recent weeks. FTX has acknowledged that since last weekend they had recorded heavy outflows. In addition, its crypto asset, FTT, plummeted 70% on Tuesday.

Conclusion:

We have to be always aware of the things that happen in the world of cryptocurrencies because as we can notice from this blog is that a simple movement can cause market crashes.

This is why we invite you to follow our blog as we always publish the latest news about this world.