The cryptocurrency Bitcoin has lost a lot of its value. The digital currency fell below $17,000 today, its lowest point in nearly two years. Bitcoin’s value has fallen by nearly a fifth this week. Other digital currencies have also fallen in value.
This happened after news that its rival Binance might acquire the crypto exchange FTX. Binance Chairman Changpeng Zhao stunned the cryptocurrency world by announcing that his company was acquiring FTX. According to Zhao, the competitor had liquidity problems. Binance added to the panic caused by the statement that it was also offering FTX coins for sale. Other investors also came to their conclusions and withdrew their money. Then FTX had no choice but to be taken over by Binance.
It is not just the uncertainty caused by another scandal that deters crypto investors. Concerns about excessive market concentration also play a role in this. If FTX were actually acquired by Binance, this party would become a very big player. One of the basic ideas of cryptocurrencies is precisely the decentralized structure in which no party is given much power.
Biggest crypto loss in a day
Crypto billionaire Sam Bankman-Fried, CEO of crypto exchange FTX, lost nearly 16 billion euros of his assets in one day: the biggest crypto loss ever. This happened after he was forced to sell FTX to rival Binance. US authorities are now investigating whether customer funds were properly handled in the troubled FTX.
increased nervousness
However, the agreement signed for the acquisition will not be binding, adding to the tension in the cryptocurrency market. Especially since Binance may decide to walk away from the deal without much trouble. This has caused Bitcoin, as well as other cryptocurrencies, to lose a lot of their value after the turmoil of the past few days.
Tokens such as aether, polkadot, and avalanche fell more than 14 percent. Solana and dogecoin lost more than a quarter. FTT, the so-called FTX utility token, has fallen by more than 75 percent. The FTX and Binance affair has triggered flashbacks among some traders of the past issues surrounding Celsius, the crypto lender that went into turmoil earlier this year. Other companies were also affected by the market crash.
On January 1 of this year, bitcoin was still worth over $47,000 (45,000 euros). Last November, the digital currency peaked at over $68,000. People who entered before December 2020 are still in the additional category.
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