Cryptocurrencies: Bitcoin Drops Below $16,000 – Binance Cancels FTX Purchase

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CryptocurrenciesBitcoin drops below $16,000 as Binance calls off FTX purchase

There is a lot of hype in the crypto financial market at the moment. Binance announced on Tuesday that it will buy its rival FTX, which has been struggling financially. Now the trading post has changed its mind.

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Bitcoin fell to a two-year low of CHF 15,755 on Thursday.

AFP

This is due to a failed FTX takeover.

This is due to a failed FTX takeover.

Reuters

Rival Binance announced on Tuesday that it will buy a rival that has been in financial trouble.

Rival Binance announced on Tuesday that it will buy a rival that has been in financial trouble.

Reuters

It’s about it

  • The price of Bitcoin is as low as it was last in December 2020.

  • The reason for the drop is a failed deal between two crypto giants.

  • Trading platform Binance announced on Tuesday that it will take over its financially troubled competitor FTX – but is now rowing back.

The cancellation of the FTX.com takeover, which was announced just a day earlier, pushed Bitcoin to $15,994 on Wednesday. The largest and oldest digital currency on the market recently fell to $16,148. In the morning, the rate was temporarily above $18,000. Subsequently, speculation of a takeover burst has already caused Bitcoin to fall below $17,000.

The price losses were triggered by renewed concerns about the stability of the relatively young crypto sector that surfaced on Tuesday. Rival Binance has announced a partial takeover of the competitor following reports of liquidity issues at its main trading venue FTX. Accordingly, there has reportedly been a significant outflow of funds from investors on FTX. Bitcoin was still trading above $20,000 on Tuesday before the news.

14 billion poorer in one day

According to corresponding press releases, Binance confirmed on Wednesday shortly before the close of US exchanges that the takeover of FTX.com had been called off. The trading platform’s difficulties have exceeded the company’s ability to help, it said in a statement. According to CNN, Sam Bankman-Fried, CEO of FTX, lost more than 90 percent of his assets in 24 hours. A few days ago his fortune was over 15 billion dollars – now it has fallen to about 1 billion dollars.

Crypto companies are at risk of extinction

“There is, of course, doubt that the liquidity crisis and the associated risk of contagion to the industry cannot ultimately be averted,” wrote expert Timo Emden of Emden Research ahead of Binance’s announcement. If prices continue to fall, several companies are likely to face existential concerns.

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(DPA/bho)

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