Cryptocurrency markets do not calm down!
These past days have been quite active for Cryptocurrency markets. Let's see what has been going on now.
U.S. stocks fell as deepening crypto sales and disappointing corporate earnings dampened risk appetite ahead of the inflation data release. With the uncertainty of the US midterm elections waning, investors are turning to Thursday's inflation readings for clues on the Federal Reserve's path to policy tightening.
Cryptocurrency markets do not calm down!
The crypto markets continue to unravel after Binance withdrew from its buyout deal with FTX. Bitcoin slumped below $16,000 to a two-year low, and Ethereum to July lows again. At the time of preparing the assessment, the largest cryptocurrency by market cap is changing hands above the $16.5k level after losing 9.67% of its market cap in the last 24 hours. Ethereum is following a similar downward trajectory, dropping 9.59% over the same period to reach the lower $1100 region. SOL leads the dive, losing 26.86% in a similar time frame. The 7-day loss for the token was 53%. Fundamental values are deteriorating as well as token performance. Over the past three days, Solana's total locked-in value (TVL) has dropped more than 40% from $1 billion to just under $600 million.
Solana Blockchain has been heavily hit by the FTX liquidity crisis, with Alameda Research being among the network's biggest bosses. Additionally, Solana validators were set to unlock more than 50 million SOL tokens, which is about 13% of the circulating supply. This can increase existing frustrations as validators will likely rush to dump SOL and exit the protocol.Binance backed out of the buyout deal after FTX discovered an insurmountable financial gap in the firm's ledger.
According to Bloomberg, FTX CEO Sam Bankman-Fried informed investors that his company is facing a deficit of up to $8 billion and needs at least $4 billion to pay off debt. Without the cash injections, the company would have had to file for bankruptcy. Adding to the financial challenges, the liquidity crunch is catching the attention of regulators as the SEC and CFTC investigate whether the firm mishandled client funds and closely scrutinize the opaque operations of Bankman-Fried's crypto empire.
