[Bitcoin Now] FTX Bankruptcy Fallout Leads to Sideways Movement Around $16,000

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Myunghwan Lee] As the fallout from the bankruptcy filing of FTX, one of the global top 3 cryptocurrency exchanges, continues, the price of the leading cryptocurrency Bitcoin is hovering around the $16,000 level.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:55 a.m. on the 15th, the price of Bitcoin was recorded at $16,638 (approximately 22.03 million KRW), up 3.00% from the previous day. Bitcoin, which was trading in the low $20,000 range before the liquidity crisis of FTX emerged on the 8th, has been moving at a price about 20% lower since the incident occurred.

The price of Bitcoin continues to show sluggish movement around the $16,000 level as the impact of FTX's bankruptcy filing persists. Earlier, FTX faced a liquidity crisis and a bank run (a situation where customers withdraw coins all at once), which ultimately led to its filing for bankruptcy protection in a U.S. local court.

At the same time, FTT, the coin issued by FTX, stopped its decline, showing a 2.99% increase from the previous day to $1.45 (approximately 1,933 KRW). Solana, which has maintained a close relationship with FTX, also rose 11.11% from the previous day to $14.06 (approximately 18,620 KRW).

Regarding FTX's bankruptcy situation, investigative authorities in the Bahamas, where the corporation is based, and the United States have launched investigations. The Bahamas Police issued a statement on the 13th (local time) saying, "The Financial Crime Investigation Department's investigation team is working closely with the Bahamas Securities Commission to investigate whether any illegal activities occurred in relation to the collapse of FTX and the provisional liquidation of 'FTX Digital Markets'." The U.S. Southern District of New York federal prosecutor's office is also investigating reports that FTX lent customers' funds to its cryptocurrency investment affiliate Alameda Research, according to The Wall Street Journal (WSJ).

Suspicions of insolvency in the cryptocurrency market have spread to other exchanges. On the 13th (local time), Crypto.com faced insolvency allegations after it was revealed that 320,000 Ethereum were transferred to the Gate.io exchange, which is of a similar scale. It is suspected that funds are being lent between cryptocurrency exchanges in a 'Ponzi-like' manner. In response, Chris Marsalek, CEO of Crypto.com, explained, "Our platform has a very strong balance sheet," and "We have not engaged in the kind of practices that led to the collapse of FTX."

Some suggest that U.S. financial authorities may strengthen cryptocurrency regulations. Kevin O'Leary, a well-known U.S. investor, stated, "The collapse of FTX does not mean the end of cryptocurrencies," and predicted, "It will stabilize the cryptocurrency industry." He also foresaw, "The end of this incident will lead to the hope of regulation."

Cryptocurrency investor sentiment has also cooled further. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment as an index, dropped 2 points from the previous day to 22 points (extreme fear) on this day. Alternative's Fear & Greed Index ranges from 0 points, indicating extreme fear and pessimism about investment, to 100 points, indicating optimism.