Crypto markets take a breather as FTX heist unfurls

Prices across cryptoassets were broadly flat on Saturday (Nov 12), as traders weighed their next move following a market sell-off in the wake of failed crypto exchange's plunge into bankruptcy.

The two largest tokens by value, Bitcoin and Ether, were largely unchanged at 5 pm New York time at around US$16,800 and US$1,260, respectively, after steep declines during the week. One standout on the upside was Dogecoin, which jumped more than 10 per cent after Tesla boss Elon Musk touted the coin on a Twitter Spaces conversation. 

Among losers, Solana and Serum - two coins tied to the Solana blockchain, which was backed by Sam Bankman-Fried, the founder and former CEO of FTX - sagged 5 per cent and 9 per cent, respectively, according to data compiled by Bloomberg and CoinMarketCap. The Financial Times reported on Saturday that the biggest asset on FTX's balance sheet as of the day before it filed for bankruptcy was US$2.2 billion worth of Serum, a token used on the decentralised derivatives exchange of the same name, which was co-founded by Bankman-Fried and runs on Solana.  

Notably, the crypto market's convulsions have largely been contained within the digital-asset realm. Even Bitcoin has managed to hold up better than some analysts might have expected given the circumstances.

"Bitcoin's price has been illogically stable in recent weeks given volatility in other markets," said analysts at Morgan Stanley in a note on Friday. "We are in the midst of another deleveraging event in the crypto ecosystem and it is so far having limited spillover to broader equity markets beyond sentiment, as crypto institutions lent to each other."

FTX, one of the industry's largest crypto trading platforms, filed for bankruptcy on Friday after a week of rescue talks, token turmoil and the launch of several US investigations. The exchange appeared to suffer a heist in the early hours of Saturday, in which US$473 million in tokens were stolen and others moved for safekeeping.

Altcoin Solana, an ecosystem partly backed by Bankman-Fried, was down almost 3 per cent, continuing its steady decline following his empire's collapse. The token made up a significant amount of holdings by Bankman-Fried's Alameda Research, according to Riyad Carey, a research analyst at Kaiko. 

Analysts at Morgan Stanley pointed to US$12,500 as the next support level for Bitcoin, marking it as the token's high in the third quarter of 2020. 

Stablecoins maintained their 1-to-1 values with the US dollar, despite a brief de-peg for Tether's USDT on Thursday. Trading was halted for GeminiUSD, a stablecoin issued by crypto exchange Gemini, on Coinbase on Saturday morning following an outsize move that pushed its price as high as US$1.68 on that exchange alone. A statement by Coinbase on its status page said teams were investigating the issue. BLOOMBERG



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