Coinbase Drops 10% On Binance-FTX Contagion, Says No Exposure To FTT
Coinbase allayed fears of its clients in the face of worries that it might have been affected by a development that made the crypto space lose all of its gains since it rallied back in October 25.
On Tuesday, the price of shares of the cryptocurrency exchange platform declined by 10.78% as it settled to $50.83.
One culprit for this sudden dip that Coinbase is experiencing is the culmination of a spat that involved its fellow exchanges Binance and FTX.
This is after Changpeng Zao, the CEO of Binance, announced his company will be buying FTX, the Bahamas-based crypto exchange platform owned by Sam Bankman-Fried.
Shortly after this news went public, FTT, the native crypto asset of FTX, experienced severe price dump as it lost almost 80% of its value in just 24 hours.
According to tracking from Coingecko, the digital asset is trading at $4.20 at the time of this writing. Its spot trading price is significantly lower than the $25 territory it held before Binance announced it will unload all of its holdings of the token.
Coinbase Assures It’s Not Affected By Binance-FTX Brouhaha
The crypto exchange admitted having technical concerns on Tuesday as users had problems with web and mobile connection.
Coinbase has yet to release a statement if said issues have already been addressed but assured it has nothing to do with the Binance-FTX brouhaha.
In fact, the company said it only has minimal exposure to Bankman-Fried’s FTX as it only has $15 million worth of deposit there that is dedicated for customer trades and business operations.
The Brian Armstrong-led firm also emphasized it has no exposure to both FTT and FTX’s investment arm, Alameda Research.
Some experts think that if the situation between FTX and Binance doesn’t take a turn for the better over the next few days, Coinbase will continue to be affected as its share prices might be pulled down to even lower levels.
Binance-FTX Drama Jolts The Crypto Market And Coinbase
It would appear that the Binance-FTX situation has greatly impacted the crypto market as many assets were smothered in crimson yesterday.
Bitcoin, for example, has once again fallen below the $18K marker after briefly reclaiming and maintaining the $21K zone. At press time, the maiden crypto is trading at $17,975.
Ethereum, the king of all altcoins, plummeted all the way down below the $1,300 marker as it is now changing hands at $1,220.
Moreover, in a span of 24 hours, the entire crypto market lost 11% of its total market cap which now stands at $913 billion.
As cryptocurrencies continue to bleed, the sector’s overall valuation will continue to decline and will probably take some time to once again regain the $1 trillion territory.Source