Markets: Bitcoin, Ether slump eases but market sell-off continues

Bitcoin recovered slightly in Wednesday afternoon trading in Asia after hitting a year-low of US$17,604 this morning amid news of Binance’s takeover of the FTX exchange following speculation of solvency issues at FTX, although several coins extended their declines.

By Oisin Mcilroy2022-11-09 8:27 AM UTC

WASHINGTON, DC – DECEMBER 08: CEO of FTX Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee at Rayburn House Office Building on Capitol Hill December 8, 2021 in Washington, DC. The committee held a hearing on "Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States." (Photo by Alex Wong/Getty Images)

See related article: Coinbase says it has minimal exposure to FTX, downplays risk

Fast facts

Bitcoin lost 6.63% in the past 24 hours to trade at US$18,410 at 2 p.m. in Hong Kong. It initially gained 6% following the announcement of Binance’s planned acquisition of FTX, but lost 12% over the following three hours amid concerns about FTX’s balance sheet and market contagion. Ether slumped 11.41% to US$18.79, according to data from CoinMarketCap.

BNB, the native token of the blockchain operated by Binance, also fell but its losses were relatively minimal compared to the rest of the top 10 crypto, inching 1.81% lower to US$315.47.

Solana led losses among the top 10, shedding 21.93% to US$20.46 – its lowest since April 2021. Dogecoin inched up from its sharp descent Wednesday morning, but was still 12.19% down for the past 24 hours to US$0.088.
FTX’s native token FTT plummeted 71.27% to US$4.52, being worth US$15.73 24 hours earlier. Binance CEO Changpeng Zhao and FTX founder and CEO Sam Bankman-Fried announced the purchase overnight on Tuesday amid a liquidity crunch at FTX with the company’s debt accounting for 54% of its assets as of June 30.

FTX reportedly sought financing of up to US$6 billion to fix its balance sheet woes, according to Semafor, which sparked market concern of a broader liquidity crunch similar to the multibillion-dollar collapse of the Terra-LUNA stablecoin project in May that bankrupted a raft of crypto firms exposed to Terra.
The crypto market downturn spread to several stocks, with financial services company Robinhood losing 20% following Binance’s announcement of the acquisition. FTX currently holds over 56 million shares of Robinhood stock.