Bitcoin Price Sinks to Lowest Level in 2 Years
At $15,649, Bitcoin has hit its lowest price since November 2020, as per CoinGecko data.
The latest price crash represents a fall of over 26% from $21,418 on November 5, before word of any of FTX’s financial issues leaked out.
The news comes as markets are reeling from continued fallout and cross-contamination from FTX’s slide into bankruptcy. Various high-profile celebrities, for example, have been ensnared in a lawsuit for promoting the exchange. Crypto firms like SALT, Liquid Global, and BlockFi have all halted withdrawals, citing exposure to FTX’s collapse.
Notably, Crypto prime broker Genesis is also reportedly considering bankruptcy after shuttering withdrawals last week.
According to sources reported by Bloomberg, the lender had been talking with private equity firm Apollo Capital and crypto exchange Binance about financing and attempted to raise $1 billion to fix its liquidity crisis.
A representative of the lender told Decrypt: "We have no plans to file bankruptcy imminently” and that its goal "is to resolve the current situation consensually without the need for any bankruptcy filing.”
Genesis pinpointed the sudden surge in customers looking to withdraw their assets in the immediate collapse of FTX as the main cause of their current financial woes.
However, FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity.— Genesis (@GenesisTrading) November 16, 2022
Bitcoin on the ropes
In addition, both regulatory and market pressures are contributing to Bitcoin’s historically bad performance.
Fidelity, one of the world's largest institutional investors and the largest provider of U.S. 401(k) savings accounts, has also recently come under new scrutiny from some U.S. politicians to drop its 401(k) Bitcoin plan.
Senators Elizabeth Warren of Massachusetts, Tina Smith of Minnesota, and Richard Durbin of Illinois all signed a letter saying that FTX’s recent slide into bankruptcy “has made it abundantly clear the digital asset industry has serious problems."
The Boston-based firm, which has around $9.9 trillion under management, had been planning to launch its own Bitcoin and Ethereum-based trading app.
Elsewhere in the market, a report from CoinShares has found that cryptocurrencies are receiving the largest inflows of short investments on record.
The report found that though there was an inflow into Bitcoin-related investment products of $14 million, around 75% of this inflow came from speculators buying products that allowed them to short Bitcoin.
Though Bitcoin hasn’t exactly been stable over the past few years, the recent post-FTX market crash exceeds the impact caused by any other market crisis this year.
The collapse of algorithmic stablecoin terraUSD in June and the subsequent collapse of crypto lender Celsius prompted Bitcoin prices to crash to a low of $33,263 in July 2022, a mammoth decline from its historical peak of $69,045 on November 10, 2021, but still well above current levels.Source