Bitcoin, world’s largest cryptocurrency by market
capitalisation, has dropped to about $16,300— its lowest level since November
2020.
The cryptocurrency price traded 7.5 percent lower on Thursday
afternoon, dropping to $16,385 by 11:51 am, according to data from
coinmarketcap.com.
Ethereum, the second-largest cryptocurrency by market cap,
also dropped by 0.39 percent to $1,180.
The total value of the cryptocurrency market is down 4.8
percent to $824 billion.
The entire cryptocurrency industry is experiencing a crisis
due to the financial turmoil of FTX, one of the fastest-growing crypto
exchanges in the world.
Binance, world’s largest cryptocurrency exchange platform by
volume, announced on Tuesday that it would acquire FTX, but it later backed out
of the deal.
Binance said that it was abandoning the deal after a due
diligence examination of the company as well as recent reports of mishandled
customer funds and alleged US agency investigations of FTX.
“As a result of
corporate due diligence, as well as the latest news reports regarding
mishandled customer funds and alleged US agency investigations, we have decided
that we will not pursue the potential acquisition of http://FTX.com,” Binance
said in a statement.
“Every time a major player in an industry fails, retail
consumers will suffer. We have seen over the last several years that the crypto
ecosystem is becoming more resilient and we believe in time that outliers that
misuse user funds will be weeded out by the free market.”
The development has caused fear and uncertainty among
investors in the volatile crypto market.
“What is complicating today’s mood on Wall Street is that
the liquidity crisis for FTX is spilling over into other cryptos,” Edward Moya,
Oanda’s senior markets analyst, said in a note on Wednesday afternoon.
“FTX was viewed as
one of the so-called safe crypto players, and their demise is raising concerns
that other key crypto companies could be vulnerable here.”
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