All cryptocurrency markets are still suffering from a noticeable decline in prices due to the repercussions of the crisis of the collapse of the empire of Sam Bankman Fried “FTX”, as the crisis revealed the extent of the company’s manipulation of investors’ money and its use for borrowing without any sufficient financial cover to pay the withdrawals of customers that poured in. On the company for fear of collapse.
Among the most important repercussions of this crisis is not only the fall in prices and the loss of confidence, but also that there are many other financial institutions such as the cryptocurrency lending platform “BlockFi”, which is the next in the series of collapse, according to those familiar with the course of the company internally, as some managers have approved The platform is preparing to declare bankruptcy within days.
Digging into the wreckage of the FTX bankruptcy showed $3.1 billion owed to major creditors, the amount of money owed raises fears of further collapses among digital asset groups.
Bitcoin, the main currency, fell about 2.5% over two days, while Ethereum - which ranks second - fell by about 6%, and the "meme" cryptocurrency, Dogecoin, one of the most speculative assets in the digital arena, fell by 12%.
Ethereum has outperformed Bitcoin over the past few trading sessions in part due to speculation that some of the $663 million that was withdrawn from FTX due to the platform's hack when the company filed for bankruptcy is now being sold.
The person who hacked FTX last week emerged as one of the largest holders of Ethereum in the world, with his holdings of the cryptocurrency Ethereum amounting to the equivalent of $288 million.
Several tech companies following the event declared that the funds taken from the FTX are "on the move," and that some have switched from Ethereum to Bitcoin, likely as part of an attempt to "pick up the buck."
The need for a regulatory framework
Most cryptocurrency experts agree that the FTX crisis calls for the speedy development of a real regulatory framework for cryptocurrencies.
Naturally, the failure of major corporations with the incessant scams and hacks raises all kinds of questions about the future of digital assets and the key technology that Blockchain supports.
Bill Ackman, founder of Pershing Square Capital Management, said on Twitter Monday that cryptocurrencies represent less than 2% of his assets, adding that overall he remains optimistic about the crypto sector.
Bitcoin traded at about $16,200 today, a far cry from the record high it reached in November 2021 at approximately $69,000, while Ethereum was hovering around $1,130.