The cryptocurrency market seemed to be characterized by more stability recently. Volatility in the price of bitcoin fell to its lowest level in 2 years. It was even lower than the volatility in the traditional currency market, the stock market and even bonds. However, the cryptocurrency market may be knocked out of balance by concerns about the FTX exchange.
Twitter, which Elon Musk has taken over, has become a platform for exchanges between three important people in the cryptocurrency market. Sam Bankman-Fried is the CEO of the FTX exchange, Changpeng Zhao is the CEO of Binance, and Caroline Ellison is the head of Alamada Research, a subsidiary of the FTX exchange. Alamada is a trading company that manages more than $1 billion in digital assets and trades between $1 billion and $10 billion a day across thousands of major tokens, altcoins and their derivatives. Alameda Research holds about forty cryptocurrencies, according to data as of the end of April.
Source: Conotoxia MT5, FTT, Daily
What's happening in the cryptocurrency market?
Over the weekend, rumors began to surface about the insolvency of the FTX cryptocurrency exchange. As a result, its owner began to assure in his Twitter posts that customers' funds are safe, and the exchange can withdraw all of them to its customers without any problems. Bankman-Fried added that the exchange does not invest its customers' funds and processes all withdrawals. The rumors may have emerged after CoinDesk published a story last week revealing that the balance sheet of FTX's sister company, Alameda Research, consisted of FTT (FTX's native token) on the exchange.
This may have led to a public war of words between Alameda CEO Caroline Ellison and Binance CEO Changpeng Zhao, also the owner of a significant number of FTT tokens, as Binance's CEO, CoinDesk notes.
FTT liquidated by Binance?
According to Zhao, "as part of Binance's exit from FTX Capital since last year, Binance received approximately the equivalent of $2.1 billion in cash (BUSD and FTT). Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books." This could have led to a collapse in the price of the FTT token, which fell by more than 20 percent, and could also lead to a collapse in the prices of other cryptocurrencies. Ellison responded to Zhao's words by saying that Alameda would be ready to buy any amount of FTT that Binanace was willing to sell for $22. However, Binance's CEO countered that it would remain on the free market and liquidate FTT there.
Source: Conotoxia MT5, BNB, Daily
After the collapse of the Terra ecosystem, another unfavorable high-level thread seems to be emerging in the cryptocurrency world. The insolvency of exchanges is a topic widely discussed on social media. Some in the community may fear a repeat of the events of many years ago and the story of Canadian exchange QuadrigaCX, only on a much larger scale.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)
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