Dan Ives, senior equity analyst at Wedbush Securities, told the BBC: “This is a black swan event that has added more fear in the crypto space. This cold winter in the crypto space has now brought more fear.”
The news sent shockwaves through the digital asset market, with cryptocurrencies falling sharply.
Bitcoin fell more than 10% to its lowest level since November 2020.
Meanwhile, online trading platform Robinhood lost more than 19% of its value, while cryptocurrency exchange Coinbase lost 10%.
FTX “True Black Swan Event”
Bitcoin slips again after FTX bankruptcy filing: The CoinDesk Market Index (CMI) fell 3.3% in early U.S. trading on Friday.
Generally speaking, the larger and more complex a company is, the longer the bankruptcy process will take — and FTX’s bankruptcy appears to be the biggest corporate failure of the year so far.
Stockmoney Lizards argues that this disintegration, though sudden, is not too different from the liquidity crisis early in Bitcoin’s history.
“We did see a real black swan event, FTX went bust”
A similar black swan moment to the past can be traced back to the Mt. Gox hack in 2014. Two other events also worth noting are the hack of the exchange Bitfinex in 2016 and the COVID-19 cross-market crash in March 2020.
As Cointelegraph reported, former FTX executive Zane Tackett even offered to create a token to replicate Bitfinex’s liquidity recovery plan, starting with its $70 million loss. But then FTX filed for Chapter 11 bankruptcy in the United States.
Changpeng Zhao, the CEO of Binance, which once planned to acquire FTX, called the development of the industry “rewinding a few years.”
Exchange BT reserves near five-year low
At the same time, we can feel the loss of user confidence in the decline of foreign exchange balances.
BTC balances on major exchanges are now at their lowest levels since February 2018, according to on-chain analytics platform CryptoQuant.
The platforms tracked by CryptoQuant ended Nov. 9 and 10 down by 35,000 and 26,000 BTC, respectively.
“BTC’s history is inextricably linked to such events, and markets will recover from them as they have in the past.”
Post time: Nov-14-2022