Crypto markets sag as funds drained from FTX switch out of Ether
CRYPTOCURRENCY prices struggled on Monday (Nov 21) in the ongoing crisis sparked by the downfall of Sam Bankman-Fried’s once powerful FTX empire.
The largest token Bitcoin has shed about 4 per cent over two days, while second-ranked Ether is roughly 7 per cent lower. Meme token Dogecoin — an arbiter of the most speculative animus in an already racy digital playground — is down 11 per cent.
Administrators are picking over the wreckage of the FTX bankruptcy, discovering that US$3.1 billion is owed to top creditors. The scope of the money outstanding is stoking worries that more digital-asset outfits will topple.
Crypto lender BlockFi could be next: people with knowledge of the matter said last week that it’s preparing to file for bankruptcy within days.
“The FTX issues are really an urgent reminder of the need for regulatory clarity and a real regulatory framework for crypto,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, said on Bloomberg TV.
He added that hype and speculation over the minting and trading of tokens “has generated a massive distraction from building actual products and services that reach consumers, solve actual problems”.
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FTX, Ether
Ether has underperformed Bitcoin over the past couple of sessions in part amid speculation that some of the US$663 million drained from FTX as it slid into bankruptcy is now being transferred out of the token.
The person or entity that raided FTX emerged last week as one of the world’s biggest holders of Ether, with a haul of about US$288 million.
Blockchain specialist Chainalysis said in tweets on Sunday that funds taken from FTX “are on the move” and some were being shifted from Ether to Bitcoin, likely as part of an effort to “cash out”.
The heady mix of corporate failure and potential criminality atop a 72 per cent drop in a gauge of the top 100 tokens over the past year is naturally leading to all kinds of questions about the future – or lack thereof – for digital assets and their underlying blockchain technology.
Pershing Square Capital Management founder Bill Ackman said on Twitter that crypto represents less than 2 per cent of his assets while adding that he remains positive on the sector overall, comparing its potential social impact to the telephone and the Internet.
Crypto ‘amateurs’
Bitcoin was trading at about US$16,000 as of 11.45 am in Singapore, a far cry from its November 2021 record high of almost US$69,000. Ether was hovering around US$1,120.
“We’ve got to get past this early stage of amateurs in crypto,” Bobby Lee, founder of crypto storage solution provider Ballet Global, said on Bloomberg Television. He added that Bitcoin could fall as low as US$10,000 if crypto markets are hit by more major blowups. BLOOMBERG
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