[Bitcoin Now] 'FTX Aftershock' BlockFi Files for Bankruptcy, Weakness and Worsening Investor Sentiment...

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Bitcoin prices are weak as the cryptocurrency lending company BlockFi filed for bankruptcy following the global cryptocurrency exchange FTX crisis.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:33 a.m. on the 29th, the price of Bitcoin was recorded at $16,193 (approximately 21.64 million KRW), down 1.06% from the previous day.

Bitcoin prices fell after news broke on the 28th (local time) that BlockFi had filed for bankruptcy protection under Chapter 11 at the bankruptcy court in Trenton, New Jersey, USA. BlockFi is known to have debts amounting to about $1.2 billion to its top 10 creditors.

This bankruptcy protection filing was influenced by the FTX crisis. Earlier, BlockFi admitted to having significant exposure to FTX and Alameda Research following the FTX incident.

BlockFi had maintained a close relationship with FTX. When the cryptocurrency price drop in June led to a liquidity crisis, Sam Bankman-Fried, the founder of FTX, stepped in as a white knight. They continued their relationship by receiving a credit line worth $400 million from FTX and its affiliate Alameda Research and borrowing funds using FTX-issued coin FTT as collateral. Cryptocurrency specialized media CoinDesk reported, "Cryptocurrency prices fell amid the ongoing contagion caused by the collapse of FTX."

As negative factors overlapped, investor sentiment also deteriorated. According to cryptocurrency data provider Alternative, the Fear & Greed Index representing investor sentiment fell by 2 points from the previous day to 26 points (fear) on the same day. Alternative's Fear & Greed Index means that the closer to 0 points, the more extreme fear and pessimism investors feel about investing, and the closer to 100 points, the more optimistic they are.