Goodbye FTX? All about the collapse🔻🔻
P.S. FTX, You'll be missed😲
Gm Gm readers!
A lot has happened in the last 48 hours in the cryto market. It’s like CZ and FTX playing around like Tom and Jerry.😤
While the market’s at an all time low, I hope ya’ll are keeping your hopes high for the better to come. 🙈
The public spat between Changpeng Zhao[CZ] (CEO of Binance) & Sam Bankman-Fried[SBF] (CEO of FTX) on Twitter has sparked a full-scale crypto cold war in the sector.
Did CZ even have any intention of buying FTX?🤔
Well here’s all the sauce on all the FTX drama that is doing rounds on the Internet. A breakdown of where it began and where it is now👇👇
2 big impending questions:
How did a multi billion dollar company collapse overnight?📉
Was buying FTX a hell of strategic move by Binance and why the U-turn?🔙
Well, well, Binance was an early investor in FTX. And we’ve all witnessed how the growth skyrocketd for FTX. Soon, FTX became the second largest exchange next to Binance.💰💸
Starting out as friends, FTX and Binance soon turned into competitors.
And then in July 2021, SBF bought back Zhao’s stake in FTX in exchnage of $2 bn in FTT - native token of the FTX ecosystem owing to license grant for FTX by Gibraltar’s regulator.
Let’s say they were now friendly competitors. Binance held a good chunk of FTT.
6th November 2022, CZ came out saying that SBF has been talking things about them with the regulators in a way that would prove detrimental for Binance.
Then Almeda Research - the trading arm of SBF’s crypto empire was also in trouble as a result of the FTT bloodbath - a Coindesk report on the leaked balance sheet stated that most of the assets on the balance sheet were FTX's own FTT tokens ($3.66 bn out of $14.6 bn in assets were held in unlocked FTT) which sent out a panic wave among investors and FTT holders and what followed next needs no mention.😲
Call it vengeance or a strategic move, CZ decided to announce to his 7.5M twitter followers that he is going to dump his entire $2 bn FTT stash.😬
Folks holding FTT knew this was bad news and people started to sell it off creating a huge panic in the market. The price of FTT dropped by 20% overnight.🔻🔻
No buyers❌ + Panic Sellers😵 = bad time for FTT and the price went down even further.
A surge in withdrawals caused a liquidity crunch and FTT plummeted to an all time low.😵
Nobody was expecting for what happened next. SBF entered into a “strategic transaction” with Binance.🧐
Then came CZ saying :“FTX was in trouble. We bought them to save them”
CZ came to rescue and Bankman signed a non-binding letter of intent for Binance to buy FTX’s non-U.S assets and in less than 24 hours, CZ decided not to pursue the deal citing problems with the company's finances as well as potential regulatory investigations leaving FTX on the verge of collapse. 🙈
9th November 2022 - the global crypto market cap dropped 10.85 % and was sitting at ~$900 billion. After this shocking run on FTX, the industry is not the same. Bitcoin has fell to a two-year low. Wait there’s more!😫
Ethereum fell down by 28% and Bitcoin by 30%. FTT - FTX’s native token lost 90% of it’s value in less than 72 hours😱
The FTX token melt down sent down tremors in the market and the crypto prices. The feud between two of the wealthiest exchange owners in the crypto world sent Bitcoin and other cryptos down a rabbit hole.😞
Solana’s SOL, as of Tuesday afternoon was down some 40% over the past 48 hours, and 50% in the past week. SOL is currently trading around $17. The Ethereum Killer lost over half its value this week. The total value locked on Solana has also halved since Sunday!
You might ask..
Why was Solana impacted?🤔
Solana is backed by Alameda Research, the crypto trading house which is run by Sam Bankman-Fried. FTX’s venture capital arm has invested in several Solana-based projects.
Keeping aside the impact for a minute,
Half a day of due diligence and Binance was ready to pull out of buying FTX. And when Binance finally announced that they were pulling out of the deal, the price of FTT crashed by yet another 50%, cratering in total by 90% over the course of a week.
Did CZ really intend to buy FTX? A company that he destroyed, publicly and ruthlessly? Has this war set crypto back 3, 4, or even 5 years?🤔😨
This feud between CZ and SBF is a clear example of how interconnected the DeFi market is. If one trading company is in trouble, it can send ripples across the entire segment, causing a domino effect. And that’s exactly what we’re witnessing right now.
The crypto market has suffered heavy losses year-to-date due to various factors, this FTX liquidity crunch was the icing on the cake that we didn’t ask for !😔🥶
Nobody had forseen this feud to unfold this way and cause a havoc in the crypto market. But,
What’s next for FTX and Binance?🤔
FTX US resigned from the Crypto Council for Innovation. 😬
The Department of Financial Protection and Innovation (DFPI) in the state of California announced on Nov. 10 that they are going to investigate the downfall of the FTX crypto exchange. 🧐🔎
A hotline was also created by DFPI for the folks affected by the events in the FTX saga. There are also rumuors speculating the arrest of SBF.☎️
Thats’s a lot of things to have unfurled in 72 hours with investors and FTX users losing money, many being locked out and no certainity of their money. 😶😶
A twitter feud stretched too far, eh?
Well that’s a wrap for today! To better days ahead 🤞🤞
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Adios 👋
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