Bitcoin, Solana, and other major currencies are crashing in the aftermath of the fall of FTX.
Key Details
- Bitcoin has lost 14.1% of its value in the past 24 hours, hitting a two-year low.
- Solana (SOL) lost 58.3% at that same time.
- This comes following the fall of the FTX Exchange. As we reported, many holders are selling in fear, causing many digital coins to lose value quickly.
- Ether, Dogecoin, and others are also facing similarly precipitous drops in value as a result.
- Bitcoin has held out better than most of the market though. It has enjoyed some relative stability in recent months due to the loyalty of its long-term investors, Time reports.
Why it’s News
The collapse marks yet another negative indicator of the state of the crypto market in 2022. The year has already seen the collapse of major coins like Bitcoin from record highs last year. Bitcoin alone has lost more than 73% of its value since November 2021.
FTX was one of the largest players in the crypto market and its collapse is destabilizing the entire market, which was already deep into the “crypto winter”.
“Cryptocurrency prices today crashed after crypto giant Binance signed a nonbinding agreement on Tuesday to buy FTX’s non-U.S. unit to help cover a ‘liquidity crunch’ at the rival exchange, in a stunning bailout that raised fresh concerns among investors about cryptocurrencies. The move is the latest emergency rescue in the world of cryptocurrencies this year, as investors pulled out from riskier assets amid rising interest rates,” says Mint.
The Problem
Things may still get worse for major currencies though. FTX’s co-founder Sam Bankman-Fried is a major player in Solana and is believed to own large quantities of the currency. This endangers the currency in the case that large amounts are sold off at once.
“FTX and Alameda Trading are in trouble. If they hold large amounts of SOL, they are very likely to exit those positions, which will tank SOL price. CoinDesk reported on November 2 that Alameda had $292 million in SOL and $863 million in locked SOL,” says Axios.
“People are dumping already—self-fulfilling prophecy,” says Economics Design’s Lisa Jy Tan.
