Binance-FTX deal affects sales on crypto market!
Here is a summariation the developments in the crypto money markets since the beginning of the week.
Global equity markets have seen mixed performances as investors await midterm results. Investors see the possibility of a downturn in the US government as a tailwind for the stocks. The dollar weakened slightly after Treasury yields pulled back from intraday highs. The crypto markets are again in turmoil after two big booms a few months ago.
Binance-FTX deal affects sales on crypto market!
The Binance-FTX tension came to a dramatic conclusion on Tuesday when Binance agreed to buy the rival exchange to ease the liquidity crisis after playing a role in triggering a massive investor exit. Concerns about bank-induced risks on centralized crypto exchanges caused the price of major cryptocurrencies to plummet. Bitcoin is changing hands in the sub-$18,000 region as of the time of the review, after losing more than 7% of its market cap in the last 24 hours. Ethereum is down 11% to test $1,300 over the same period. Major altcoins in various shades of red. FTT lost more than 70% of market cap in recent sales, with many mid-to-large altcoins losing double-digit percentages over the same period.In the derivatives market, total liquidations in Bitcoin futures exceeded $900 million in the past day, the vast majority of which are long positions. Despite the magnitude of the shock, IV peaks in the options market are still significantly lower than peaks in May and June.
Binance signed a letter of intent to save FTX from bankruptcy. The thread was pulled after CoinDesk released incriminating evidence pointing to the corruption behind the FTX-Alameda alliance. On Monday, Binance founder CZ announced that Binance will sell all of its FTT holdings worth approximately $530 million, triggering an investor exit. Selling pressure pushed FTT below key support levels and sparked a major crisis of confidence over FTX and Alameda's sleazy balance sheet, resulting in a liquidity crunch that ultimately warranted the final buyout deal.
On-chain data shows that nearly $200 million worth of stablecoins have left FTX's reserve in the past seven days. Turbulence has spread to the wider market, rekindling memories of market sophistication initiated by the Terra and 3AC explosions earlier this year.
