[Bitcoin Now] Endless Plunge After FTX Acquisition Withdrawal... Plummets to $16,000

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Myunghwan Lee] The world's largest cryptocurrency exchange Binance announced the withdrawal of its acquisition of FTX, which was experiencing a liquidity crisis, leading to a continuous plunge in the cryptocurrency market.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:10 AM on the 10th, the price of Bitcoin was recorded at $16,151 (approximately 22.12 million KRW), down 12.41% from the previous day. At the same time, Ethereum, the leading altcoin, was down 14.49% to $1,135 (approximately 1.55 million KRW). Dogecoin also plunged by 13.85%, while FTT, the cryptocurrency issued by FTX, the main cause of this crisis, showed a staggering 58.41% drop compared to the previous day.

Binance, which announced the acquisition of cryptocurrency exchange FTX the day before, withdrew the acquisition just one day later, causing the cryptocurrency market to continue its plunge. Binance announced the suspension of the acquisition contract on the same day, just one day after agreeing on a letter of intent (LOI) with FTX. Binance stated that based on the results of due diligence on FTX and the fact that regulatory authorities such as the U.S. Securities and Exchange Commission (SEC) have launched investigations into FTX's management of customer funds, they decided to halt the acquisition.

FTX is currently facing a crisis due to a bank run (a situation where customers withdraw coins all at once) caused by concerns over the financial instability of affiliated companies. With Binance, the last hope, giving up on the acquisition, FTX is expected to be engulfed again by bankruptcy rumors. Among experts, there are even concerns that if this situation worsens, it could recreate the Terra-Luna incident from last May, which triggered a chain reaction of crashes in the coin market.

The downward trend in Bitcoin prices is expected to continue for the time being. Bob Iaccino, Chief Strategist at Path Trading Partners, said, "This incident is one of several catalysts," and added, "It would not be surprising if Bitcoin prices fall to $9,000."

As cryptocurrency prices plummet, investor sentiment is also freezing solid. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment as an index, dropped sharply by 7 points from 29 points (fear) the previous day to 22 points (extreme fear) on this day. Alternative's Fear & Greed Index means that the closer the score is to 0, the more extreme the fear and pessimism about investment, while the closer it is to 100, the more optimistic the sentiment.