Reporter | Si LinweiThe cryptocurrency market has experienced a sharp decline after being embroiled in a highly anticipated acquisition case.On November 10th, market data showed that Bitcoin's quotation had fallen below $16000
Reporter | Si Linwei
The cryptocurrency market has experienced a sharp decline after being embroiled in a highly anticipated acquisition case.
On November 10th, market data showed that Bitcoin's quotation had fallen below $16000. As of the time of publication, the latest price was $15753, with a 24-hour decline of 15.8% and a weekly decline of 23.0%, reaching the lowest point since November 2020. Bitcoin prices stabilized at $20000 before this sharp drop and briefly reached $21000, but now they have fallen back into a waterfall market.
Ethereum, another major cryptocurrency, also suffered heavy losses, with a quote of $1115 as of the time of publication, a 24-hour decline of 16.9%, and a weekly decline of over 29%.
At a time when the cryptocurrency market was shaking, a highly anticipated acquisition case in the industry ushered in a turning point.
On November 10th, Coin On stated in a statement that "we hope to support FTX's clients in providing liquidity, but these issues are beyond our control or assistance capabilities." Coin On emphasized that every time a major player in an industry fails, retail investors will suffer losses. In the past few years, Coin An believes that cryptocurrencies have resilience, and the abnormal behavior of abusing user funds will sooner or later be eliminated by the free market. This also means that in just one day, Coin An chose to give up acquiring another cryptocurrency giant in the industry, FTX.
Another key news is that US regulatory agencies are beginning to notice the collapse of FTX. According to foreign media reports on Wednesday, the US Securities and Exchange Commission is deepening its investigation into FTX, and the Commodity Futures Trading Commission (CFTC) is also investigating the trading platform.
Three sources stated that the investigations by the Securities and Exchange Commission and the Commodity Futures Trading Commission are related to the liquidity tightening of FTX. Coin An also mentioned in the statement that it has abandoned the acquisition due to "the latest investigation report from US regulatory agencies".
On November 9th, FTX agreed to sell its non US assets to competitor Coin On, one of the world's largest cryptocurrency exchanges, while the collapse of its local exchange token FTT prices led to a tightening of liquidity. At 0:00 on the 9th, SBF (SamBankman Fried), the founder of FTX, and Zhao Changpeng (nicknamed CZ), the founder of Coin Security, both posted articles stating that they had reached a preliminary agreement on the acquisition of FTX by Coin Security.
Zhao Changpeng tweeted, "This afternoon (November 8th local time in the United States), FTX sought help from us due to a severe liquidity squeeze. In order to protect users, we signed a non binding letter of intent, and Coin An intends to fully acquire (FTX). We will conduct a complete investigation into this matter in the coming days
Zhao Changpeng said in an interview with foreign media that less than 24 hours ago, SBF called me. Prior to this, I knew very little about the internal situation of FTX. I can use our income to do some mental calculations to guess their income, but this won't be very accurate. I was surprised when he wanted to speak. My first reaction was that he wanted to engage in over-the-counter trading... but it turned out to be the way it is now
With the market's attention to FTX, more and more sources claim that there are insurmountable financial loopholes in FTX's balance sheet.
Shortly after the announcement of the proposed acquisition of FTX, the FTT price of the FTX platform token briefly surged, breaking through $20, but then quickly plunged, dropping to a low of $2.57 in the past day. Many practitioners believe that this is a comprehensive victory for the industry's largest player, Coin An, but Zhao Changpeng does not believe so. On the second day of planning to rescue FTX, he stated that the near collapse of FTX had seriously shaken people's confidence in the encryption industry and would trigger stricter scrutiny by regulatory agencies.
CZ stated in a memo to its employees that this rescue has consolidated Coin An's position as the world's largest cryptocurrency trading platform, but it is not a "victory". Regulatory authorities will conduct stricter scrutiny of trading platforms and it will be more difficult to obtain licenses globally.
This is also the second time that the cryptocurrency industry has fallen into a sharp decline following the outbreak of algorithmic stable currency "UST" in May this year. Due to the impact of the FTX liquidity crisis, many crypto financial institutions have begun to fall into serial liquidation. One of the popular public chains, Solana's token prices, has dropped by 57% in a short period of time. FTX is one of the main investors in this ecosystem.
After the largest cryptocurrency exchange, Coin An, gave up its rescue, FTX is gradually heading towards the end. According to multiple foreign media reports, SBF told investors that after the liquidity crisis, FTX's short position reached as high as $8 billion. If it does not receive liquidity replenishment, the platform is on the brink of bankruptcy.
During the crisis, SBF has disappeared from the Bloomberg Billionaires Index, and its personal wealth plummeted nearly 94% to $991.5 million in just one day. On his social media, the former billionaire deleted a tweet claiming that FTX has sufficient liquidity and will always protect investor assets.
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