The crypto market has been on a journey since the beginning of the year 2022. Starting from the market crash since Terra Luna faced a de-pegging of its tokens, to the biggest events in the crypto history; the Ethereum Merge. However, the crypto winter has been a dominating factor for the crypto space this year. As per many analysts’ sentiments, the bear market is for sorting the portfolios and rehearsing the strategies investors follow. With that being the bandwagon for a bit, last week, Binance’s acquisition of FTX and then pulling back on their buying has gotten the crypto space into a whirlwind of spiraling actions one after another.
The events from last week has had a clear impact on the crypto space, overall. so much so, that the last week’s collapse of the FTX exchange can be said to be one of the worst-ever episodes in the crypto industry. A huge impact of it is very much visible on the digital-asset markets. The price of the crypto trendsetter, Bitcoin tumbled down by 22% in one week through Sunday! It is BTC’s worst weekly performance since mid-June when the crypto space was wrestling with the aftermath of the Terra blockchain’s collapse. Various crypto analysts are now in the assessment zone to understand what can come next for ailing digital-asset markets and policy ramifications for this reputation-wounded blockchain industry. Researchers at Coinbase Institutional say bitcoin, currently around $16,236, might be looking at a further price drop, possibly as low as $13,500.
Explained in Detail: What caused the FTX Collapse?
The FTX Crash: CEO Sam Bankman-Fried’s Assets Falls from $16 billion to zero
Soon after the to and fro between the two biggest names in the crypto exchange world, FTX saw one incident after another. After Binance pulled off its acquisition offer, the FTX crypto exchange collapse, and now the assets of FTX CEO, Sand Bankman Fried stand at zero from a whopping $16 billion last week! The Times of India has commented that this is maybe one of the greatest destruction of wealth incidents in history! This downfall of Sam Bankman’s crypto empire; which came up when he filed for bankruptcy on Friday coupled with his resignation; means that the assets owned by the mogul, which were once likened to John Pierpont Morgan have now become worthless. The TOI reported that at the peak, the 30-year-old was worth $26 billion and he was still worth almost $16 billion at the start of the week.
Source: Bloomberg Billionaire’s Index
While FTX filed for Chapter 11 Bankruptcy, it also stated that Sand Bankman Fried will be succeeded by John J. Ray III. According to the announcement, the Employees are expected to continue with the company and “assist Mr. Ray and independent professionals” during bankruptcy. The FTX collapse started after the exchange faced a liquidity crunch at one of its affiliates. FTX.US said on Thursday, customers should close out any positions they want to and that trading may be halted in a few days. While in the Bahamas, where FTX .com is actually based out off, the assets had been frozen by the authorities. As an ongoing activity, Bankman is being investigated by the US Securities and Exchange Commission for potential violations of securities rules.
Source: Times Of India, CoinDesk