According to senior market analyst at Oanda Edward Moya, "Today is a poor day for cryptocurrency." "To salvage Sam Bankman-FTX Fried's cryptocurrency exchange, Binance had to intervene. A liquidity squeeze from him has caused a wave of unease to sweep the cryptoverse. He has served as the white knight during this crypto winter.
The growing controversy at FTX, a well-known crypto exchange, is most likely to blame for the crash. Binance CEO Changpeng Zhao declared that Binance would buy FTX as a result of a serious liquidity situation at FTX. The largest centralised cryptocurrency exchange in the world is called Binance, and FTX was one of its main rivals. But soon after announcing the agreement, Binance declared late on Wednesday afternoon that it would abandon its plans and not buy FTX, further shocking the market.
We have determined that we will not pursue the prospective acquisition of FTX.com in light of our corporate due diligence as well as the most recent news stories about improperly handled customer cash and purported US agency investigations, Binance wrote on Twitter.
The exchange with a base in the United States, FTX US, has now declared bankruptcy.
At the beginning of the week, cryptocurrencies took a beating, with bitcoin dropping almost 20% in two days at one point due to worries about FTX and the potential effects on the FTT token.
As a result of all the news, the price of bitcoin crashed, dropping late on Wednesday afternoon below $16,000 for the first time in two years. Similar declines were experienced by Ethereum, which on Wednesday fell below $1,200 for the first price since the summer's crypto collapse.
Following several weeks of rather stable pricing for bitcoin and ethereum, this week's slump signals an abrupt turnabout. Over the past week, both tokens have fallen by more than 20%. The news on Wednesday by Binance that it would acquire rival FTX was followed by a downturn in investor confidence and mood as a result of questions about FTX's liquidity. However, Binance backed out of the agreement, which finally resulted in FTX's current situation: bankruptcy.huge
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