Bitcoin (BTC) has fallen below $17,000 for the first time since November 2020 as FTT collapsed and as rumours spread that Binance might not go ahead with the purchase of FTX. The whole crypto market is experiencing massive losses and multiple digital currencies such as Solana (SOL) have been heavily affected. Indeed, some exchanges have also announced they were halting deposits and withdrawals for some tokens on the Solana blockchain network.
Bitcoin Falls Below $17,000
Bitcoin, the world’s most popular virtual currency, has fallen below $17,000 for the first time since November 2020, when the crypto industry was starting one of the largest bull markets in history. This has created a situation in which many other virtual currencies followed the trend and moved lower as well.
Why did Bitcoin crash? Bitcoin crashed due to many reasons. The first and most obvious one is related to what happened to FTX and how large crypto companies have been facing liquidity issues. Despite the fact that companies assure that they keep reserves 1:1 with what users hold on their platforms, this is usually not the case.
According to CoinGecko, Bitcoin lost 15% of its price in the last 24 hours. The entire crypto market lost 16% of its market capitalization, which currently stands at $885 billion. Meanwhile, Bitcoin’s market cap is currently at $328 billion.
Just to put it into perspective, Ethereum (ETH) lost 25% of its value in the last 7 days, and Solana (SOL) halved in price during the same period of time. This is one of the largest sell-offs in the crypto market since it was created.
FTT Collapses as Binance Might Not Go Ahead with FTX Purchase
But what happened with FTT and its collapse? The price of the native asset to the FTX platform moved from $25 a few days ago to below $4 at the time of writing this article. Changpeng Zhao, the CEO of Binance, the largest cryptocurrency exchange in the market, offered to purchase FTX, nevertheless, he might be walking away from this deal.
AFTER REVIEWING THE CRYPTO EXCHANGE'S BOOKS, BINANCE IS HIGHLY UNLIKELY TO CARRY OUT ITS PROPOSED RESCUE OF FTX – COINDESK.
— Breaking Market News ⚡️ (@financialjuice) November 9, 2022
After losing close to 80% of its value, FTT has affected the whole crypto market, which is now in red. At the same time, US regulators were performing different checks in order to understand the way in which FTX handled users’ funds in recent days.
This is an ongoing situation that could create further volatility in the market as soon as new issues get uncovered. Therefore, some analysts believe that it might be possible for Bitcoin to fall even further in the coming months, therefore, it will be very important for the whole market to stabilize and recover from the most recent situation.
At the same time, due to the current issues, FTX is having some issues redeeming some payments and withdrawals from users that have funds in this crypto exchange. This has also been happening for Solana blockchain tokens in other exchanges such as Crypto.com.
At the time of writing this article, Bitcoin is being traded at $17,000.