Bitcoin Slides Down Heavily After Binance Abandons FTX Deal


Author: Maria Andretti

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Cryptocurrencies extended their slide for a second day Wednesday as the market absorbed the potential collapse of popular crypto exchange FTX. Prices were pressured to start the day and plunged by late afternoon. This happened as Binance, the largest global exchange by volume, abandoned plans to acquire Sam Bankman-Fried’s FTX. This happened after a due diligence exam and recent reports of mishandled customer funds. All of these followed an alleged U.S. agency investigation of FTX. Bitcoin fell 12% before 4:30 p.m. ET to just under $16,000, hitting a low not seen since November 2020, according to Coin Metrics. 

How Have The Mighty Bitcoin Fallen

The Coin reached its all-time high of $68,982.20 one year ago Thursday. Meanwhile, ether tumbled 14%, to $1,128.87. The Bankman-Fried empire quickly unraveled after a report last week showed a large part of the balance sheet at Alameda Research. Alameda Research is the trading company where Bankman-Fried was also CEO. The company had been concentrated in FTX Token (FTT), the native token of the FTX trading platform.

After some light sparring on Twitter with Bankman-Fried, Binance CEO Changpeng Zhao made a crucial announcement. He announced that his company was offloading the FTT on its books. This will consequently lead to a run on the popular FTX exchange and a liquidity crisis.

FTX counts some of the biggest names in finance — including SoftBank, BlackRock, Sequoia and Paradigm — among its investors.

FTT slumped another 63% Wednesday, after plunging more than 75% the day before. The Solana token also continued to fall. It was last down 45%, after dropping more than 26% Tuesday. 

Furthermore, Alameda Research, the trading firm also owned by Sam Bankman-Fried, was an early backer of the Solana project.

“Market factors such as providing SOL token liquidity as well as support for Solana ecosystem projects on FTX exchange has been an important driver for Solana’s success.” The above statement was by Bernstein’s Gautam Chhugani. “This is an adverse event for the Solana ecosystem in the short run. Further, given FTX/Alameda’s balance sheet situation, there may be near term pressure on its Solana holdings. Especially as the situation resolves.”

The Impact On The Cryptocurrency Industry

The bombshell will set the crypto industry back. Analysts foresee further regulatory scrutiny of offshore exchanges. One where the majority of crypto derivatives trading takes place. It’s also unclear how much financial contagion will spill into the rest of the market.

Additionally, Bankman-Fried, known as SBF, had recently been praised as a “white knight” in the industry. This is because of his attempt to rescue crypto service firms such as BlockFi and Voyager. Service firms that succumbed to the crypto contagion last spring.

However, for newcomers to the crypto market, SBF and FTX became the faces of the industry. This is as a result of the brand securing the naming rights to the Miami Heat basketball team’s stadium last year. This move brought on Tom Brady and Giselle Bündchen as company ambassadors, and becoming a mega-donor to Democratic politics.

How Will Bitcoin Firm Guru – Sam – Deal In The Next Few Months?

“Given the public-facing nature of FTX CEO Sam Bankman-Fried and the size of FTX, we believe that the week’s events could cause some loss of consumer confidence in the crypto industry, beyond that seen in the aftermath of the 3AC, Celsius, and Voyager events that took place earlier this year.” Especially if panic spreads and crypto prices keep dropping. This was said by KBW analysts in a note on Tuesday. “It may take time for customers to regain trust in the industry, broadly speaking (and we think regulation could help this.”

BWCEvent aspires to share balanced and credible details on cryptocurrency, finance, trading, and stocks. Yet, we refrain from giving financial suggestions, urging users to engage in personal research and meticulous verification.


Maria Andretti is an Administrative Assistant with eight years of experience working alongside the VP finance of a Fortune 500 company.