Market Wrap: Bitcoin, Other Cryptos Continue to Plummet
Crypto markets’ misery seemed boundless on Tuesday amid the ongoing fallout from crypto exchange FTX’s distress.
BTC, the largest cryptocurrency by market capitalization, was recently trading at about $16,300, a more than 10% decline to its lowest level in two years. Bitcoin has been swept up in the cryptocurrency industry’s latest crisis, FTX’s liquidity issues, a mass exodus from the exchange and proposed sale to rival Binance that collapsed. On Wednesday, CoinDesk reported that Binance was highly unlikely to follow through on its non-binding letter of intent after reviewing FTX’s internal data and loan commitments. The story was later confirmed to CoinDesk.
"This is another one of those catalysts," said Bob Iaccino, Path Trading Partners co-founder and chief market strategist. "I wouldn't be surprised if bitcoin went as low as $9,000, which for me, as someone who got out of bitcoin and is waiting to get in again, would actually be a positive."
Ether was recently changing hands at about $1,150, off roughly 12% to its lowest level since July. Other major cryptocurrencies continued to plunge for a third consecutive day as investors fretted over every development in an industry already rocking from calamities involving crypto giants Terraform Labs, Three Arrows Capital and Celsius Network.
FTX’s FTT token had recently dropped almost 50% a day after plummeting about 80% and was trading at just $2.62. The Solana platform’s SOL token had recently fallen more than 45% to continue its downward momentum of recent days. Last week, CoinDesk reported that a copy of FTX sister company Alameda's balance sheet showed the firm held $292 million of “unlocked SOL,” $863 million of “locked SOL” and $41 million of “SOL collateral.” Even Binance’s BNB token was down about 15% after outperforming most other cryptos on Tuesday.
The CoinDesk Market Index, a broad-based index designed to measure the market capitalization weighted performance of the digital asset market, was down 8%.
A day after U.S. midterm elections, stocks saw their first red of the week, with the tech-heavy Nasdaq and S&P 500 dropping 2.4% and 2%, respectively. The Dow Jones Industrial Average (DJIA) was off 1.9%. Safe haven gold ticked down slightly.
In an email, Edward Moya, senior market analyst for foreign exchange market maker Oanda, wrote that the FTX debacle and its much-admired CEO, Sam Bankman-Fried, has shaken an industry often criticized for its lack of guardrails.
“Sam Bankman-Fried was supposed to be bulletproof,” Moya wrote. “SBF was crypto’s ‘White Knight’ and the implosion of FTX means no one is safe. The stabilization period for crypto is over and now we wait to see if other contagion risks emerge.”
These Four Key Charts Shed Light on the FTX Exchange's Spectacular Collapse
By Sage D. Young
Understanding the volatility stemming from the FTX drama continues with stablecoin outflows. According to Nansen data, in the past seven days starting on Monday, Nov. 7, FTX led all exchanges in stablecoin outflows. Some $451 million worth of stablecoins have left FTX, more than the combined outflows of KuCoin, Crypto.com and OKX.
Specifically, FTX’s holdings of USDC and USDT have nosedived dramatically. Between Friday, Nov. 4, and Tuesday, Nov. 8, Nansen data shows FTX’s USDC holdings dropped about $137 million, roughly 84%, while its USDT holdings dropped from $198 million to $68 million.
According to CryptoQuant, FTX’s stablecoin reserve stands at roughly $156 million currently, down more than 78% since Oct. 24.
- Binance Tops Up Emergency Insurance Fund 'SAFU' to $1B After BNB Volatility: SAFU is an emergency insurance fund that was established by Binance in July 2018 to protect users' funds. When the fund was established, Binance committed a percentage of trading fees to grow it to a sizable level to safeguard users. Binance token-related addresses were topped up with over $700 million in different tokens, while a bitcoin address was funded with $300 million. Read more here.
- Solana Blockchain Hit by FTX Tremors as Nearly $800M SOL Tokens Set to Be Unstaked: Solana validators who provide security to the blockchain are set to unlock nearly $800 million worth of their SOL holdings as the end of the token lock-in period known as “Epoch 370” approaches soon. The scheduled-to-be-unlocked SOL tokens represent approximately 15% of its circulating supply. SOL's price recently plunged 45% to less than $14 in the past 24 hours. Read more here.
- Listen 🎧: Today’s "CoinDesk Markets Daily" podcast discusses the latest market movements and a look at the fall of another risky titan.
- Crypto Fund Alameda's Ethereum Wallet Holdings Slumped 50% Since October: On-chain analysis shows Alameda has a $3 million debt spread over several Ethereum addresses.
- Who Still Has Exposure to FTX?: Genesis, Wintermute, Multicoin and more – a running list of those with continued exposure to the embattled cryptocurrency exchange.
- Crypto.com Halts Solana USDC and USDT Deposits, Withdrawals: The crypto trading platform cited “recent industry events” in an email to users announcing the suspension.
- Crypto Exchanges Scramble to Compile 'Proof of Reserves' as FTX Contagion Grips Markets: Nine prominent exchanges said they will publish proof-of-their-reserve holdings in the next month.
- Cathie Wood’s ARK Loads Up on COIN Despite FTX Crisis: ARK says it's buying 420,949 COIN shares, which would equate to $21 million, given current market prices.
- Inflation Expected to Tick Down in Latest CPI Report: Analysts reporting to FactSet estimate the CPI will drop to 8%, but whether the decline is enough to encourage the Federal Reserve to ratchet back its monetary hawkishness remains unclear.
- Vitalik Buterin’s New Ethereum Road Map Takes Aim at MEV and Censorship: Amid a number of new changes, Buterin’s new vision for Ethereum adds a section aimed at curtailing the threats of centralization.