The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk Reporter Was this newsletter forwarded to you? Sign up here. |
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So, Tuesday was eventful in crypto-land. Here's what you need to know today. |
- BTC and ETH are firmly in the red after traders were caught off guard.
- Exchanges scramble to publish fund reserves to allay liquidity fears.
- Stablecoin issuers Circle and Tether attempt to distance themselves from FTX and Alameda Research.
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Long crypto traders have liquidated over $700 million in the past 24 hours amid the seismic events involving crypto exchange FTX's proposed sale to Binance, which is also a crypto exchange. Bitcoin and ether have declined by over 11% and 20% respectively, in the past 24 hours, catching many traders off guard. Meanwhile, futures tracking bitcoin and ether saw $390 million in losses due to liquidations in the past 24 hours. The turbulence emanated from concerns about FTX's solvency following a report by CoinDesk detailing how its sister firm Alameda Research's balance sheet was full of FTX's native token, FTT, causing a widespread exodus from the asset. |
Crypto exchanges have been scrambling to publish their fund reserves to allay investors' fears over contagion risks following FTX's liquidity woes. In the past 24 hours, seven exchanges, including Binance, Huobi and OKX, have said they will publish their audited fund reserves to increase transparency. Binance founder Changpeng Zhao urged industry players to provide "proof of reserves" following the FTX debacle. Stablecoin heavyweights Circle and Tether distanced themselves from FTX hoping to calm fears about the crypto exchange's sudden decline. Circle CEO Jeremy Allaire said that even though Circle and FTX hold small equity stakes in each other, Circle has never given any loans to FTX or received any FTT as collateral. Tether Chief Technology Officer Paolo Ardoino described Tether's FTX exposure as "0. Null." |
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Market Insight: FTX Collapse Laid Bear |
FTX's woes leading to its proposed sale to Binance can be summed up by looking at the huge amount of liquidity that has departed its platform in recent days. Crypto institutions such as Nexo, Circle and Jump Trading withdrew an eye-watering $1.87 billion in the past week, according to Nansen data. Crypto lender Nexo led the charge, removing $408 million worth of ether. Some $451 million worth of stablecoins left FTX starting on Monday, according to Nansen data. FTX's stablecoin reserves stand at roughly $156 million, a decrease of over 78% since Oct. 24, CryptoQuant data shows. FTX native token FTT crashed around 80% on Tuesday in tandem with a dramatic spike in its trading volume, demonstrating that events prompted a surge in interest in the token and that its downfall was accompanied by significant price discovery. Read the full story by Sage D. Young. |
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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