Binance Acquires FTX in The Wake of a Crypto Market Meltdown
Another big bankruptcy in the cryptocurrency market!
At a time when the Federal Reserve's monetary policy began to put less and less pressure on the cryptocurrency market and it seemed that the worst time was behind us, the topic of a liquidity crisis on the popular FTX platform and the possible acquisition of this entity by Binance emerged. This situation contributed to a sharp drop in the prices of the vast majority of cryptocurrency projects. The biggest loser here is, of course, the FTX (FTT) token, the price of which fell by 90% only during Tuesday's trading, which reminded the cryptocurrency community of the May collapse of TerraUSD. Will FTX end up as tragic as LUNA?
Binance Acquires FTX
The global cryptocurrency giant Binance officially announced on Tuesday that it has signed a letter of intent to take over FTX Trading, the third largest cryptocurrency exchange, which, despite a daily turnover of up to $ 15 billion, is struggling with a liquidity crisis.
FTX confirmed the above-mentioned news, indicating that the management of this exchange has agreed to a strategic transaction with Binance, additionally informing that FTX is expecting due diligence.
Thanks to this acquisition, Binance has a chance to become the undisputed leader among cryptocurrency exchanges.
"There is a lot to discuss and it will take some time," Binance founder Changpeng Zhao pointed out on his Twitter account, adding that the situation is very dynamic and Binance has the right to withdraw from this transaction at any time.
Binance sells FTX (FTT) tokens
Binance also announced that due to the ambiguity surrounding the financial security of the FTX exchange, it is getting rid of all FTT tokens in its possession. According to market reports, as much as 50 percent of the assets of this American cryptocurrency exchange, or about USD 14 billion, were to be "fictitious" or "taken out of thin air".
FTX Token collapsed by 90%
This information contributed to a panicked sale that saw FTX (FTT) pricing down nearly 90 percent in just 3 hours. During these 3 hours, the FTT price dropped from $ 24.22 to just $ 2.51, which was the lowest level since April 2020.
It is worth recalling here that at the stage of September 2021, one FTX token was worth over USD 87.
FTX Token is the second LUNA
This sale led to the fact that some cryptocurrency market participants directly called the FTX token the second LUNA. Let us recall that after the stablecoin TerraUSD (UST), whose task was to maintain the USD 1 exchange rate, fell to around USD 0.05, and its sister token LUNA plunged down by 100 percent. This event triggered a multi-billion dollar wave of sell-offs seen across the entire cryptocurrency market.
Bitcoin Struggles With FTX Bankruptcy
The turmoil related to the potential takeover of the FTX exchange by Binance and the collapse of the FTX token quotations were unfortunately reflected in the charts of the vast majority of cryptocurrencies. As a result, Bitcoin systematically depreciated during Tuesday's trading and fell to around $ 17,000, which was the lowest level since November 2020.
The FTX crisis made BTC cheaper by more than 20 percent in less than 3 days.
Even before the end of Tuesday's trading, the exchange rate of the oldest cryptocurrency returned above the technical support level of $ 18,500.
