Cryptocurrencies Drop the Most in Weeks Due to FTT and Macro Risks
The prices of Bitcoin and Ether are close to their two-week lows. As investors expressed doubts about the viability of the sector in response to Binance's intention to sell $530 ,000,000 of FTT, cryptocurrency prices fell simultaneously. Even though stocks rose on Monday, the majority of cryptocurrencies experienced price declines. One of the greatest losers was Solana, a token sponsored by FTX and Alameda. Clients of the defunct cryptocurrency exchange FTX.com felt such a strong feeling of foreboding that they withdrew $430 million in Bitcoin in just four days. Clients rushed to remove their money out of concern about FTX.com's survival.
To reach $19,370, the lowest rate in weeks, Bitcoin fell as much as 6.4%. Smaller FTX-related cryptocurrencies and tokens suffered significant losses. On Tuesday, FTT fell 18%, and Solana, which is supported by FTX and Alameda, fell close to 20%. A week of unrest in the cryptocurrency markets following the announcement of the FTT sales by the chief executive officer of Binance on Monday has been extended by the selloff. The FTT Token made up a sizable chunk of Bankman-balance Fried's trading's sheet.
On Monday, Bankman-Fried made an effort to calm investors by pointing out that rumors had been spreading and that the market maintained audited financials. The markets appear to be uneasy because to worries about FTX and Alameda, which is currently having an effect on all cryptocurrencies.
A broader decline in risk assets and an increase in interest rates by financial institutions to counteract rising inflation have also affected crypto values. On Tuesday, ether fell 5.6% to $1,486. This year has been difficult for not only virtual currencies due to a number of significant business failures and collapses, including those of the lender Celsius and hedge fund Three Arrows Capital, which have increased investor apprehension. But many institutions ensure their clients that situation is getting better. On the other hand, there are possible market players that bite back and are pushing to negative pricing pressure due to the reductions, forcing traders to sell.