Bitcoin bounces slightly after hitting 2-year low as traders try to gauge FTX contagion
PUBLISHED TUE, NOV 22 20225:02 AM ESTUPDATED 3 MIN AGO
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- Bitcoin on Tuesday hit a two-year low as the cryptocurrency market takes a bruising following the collapse of major exchange FTX.
- The cryptocurrency market has lost more than $1.4 trillion in value this year as the industry has been plagued with problems from failed projects to a liquidity crunch, exacerbated by the fall of FTX.
- Crypto prices remain under pressure as investors fear the FTX collapse could cause a contagion across the industry.
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The crypto market has been battered this year, with more than $2 trillion wiped off its value since its peak in Nov. 2021. Cryptocurrencies have been under pressure after the collapse of major exchange FTX.
Jonathan Raa | Nurphoto | Getty Images
Bitcoin reversed higher on Tuesday after briefly hitting a two-year low, as investors assess potential damage still to come in the aftermath of FTX’s collapse.
Bitcoin was trading higher by 1.5% $16,045.24, according to Coin Metrics. Earlier in the day it fell to $15,480, its lowest level since Nov. 11, 2020.
The cryptocurrency market has lost more than $1.4 trillion in value this year as the industry has been plagued with problems from failed projects to a liquidity crunch, exacerbated by the fall of FTX, once one of the world’s largest exchanges.
Crypto’s latest issues began after Changpeng Zhao, the CEO of Binance, said his exchange would sell its FTT tokens. FTT is the native digital currency of FTX’s crypto exchange. Binance’s move sparked the collapse of FTX, a company once valued at $32 billion. FTX has since filed for bankruptcy.
To make matters worse, hackers stole around $477 million of cryptocurrency from FTX, the bulk of which has been converted into the digital coin ether. But the hackers have begun to launder that money into bitcoin. Because they are selling ether, the price of ether has also been under pressure.
Ether was trading down nearly 2% at $1,109.55 at 8:12 a.m. ET.
Hackers begin laundering crypto stolen from collapsed exchange FTX
Disgraced FTX founder Sam Bankman-Fried stepped down as CEO earlier this month and was replaced by John Ray III.
Ray is looking to sell or restructure FTX’s global empire.
Meanwhile, Bankman-Fried is still holding out hope that he can broker some sort of deal to bail out FTX, CNBC reported.
But crypto prices remain under pressure as investors fear the FTX collapse could cause contagion across the industry.
Earlier this year, the collapse of a so-called algorithmic stablecoin terraUSD sent shockwaves across the crypto world and contributed to the fall of other entities such as hedge fund Three Arrows Capital.
Investors are concerned about similar ripple effects from FTX’s failure.