FTX & Alameda Research’s Downfall
FTX Tokens, also known as FTT, made up a sizable portion of Alameda Research’s US$ 14.6 billion in assets as of June 30th, according to a Coindesk story published on November 2nd, 2022. This token was responsible for $292 million in “locked FTT,” $3.66 billion in “unlocked FTT,” and $2.16 billion in “FTT collateral.” The industry then started to wonder if this was something to worry about.
In response to mounting FUD (fear, uncertainty, and doubt), Binance CEO Changpeng Zhao (CZ) tweeted on November 7 that the company planned to sell its FTT holdings. The larger community started selling off their FTT in response to CZ’s statement, which detailed Binance’s intention to progressively reduce its shares. In response, Caroline Ellison, CEO of Alameda Research, stated that the trading company will buy Binance’s FTT for $22. As a result, FTT stabilized and some confidence was restored.
On-chain analysts noted later that day that FTX’s reserves were depleting. A bank run was sparked by the ensuing spark of fear, and FTX was subjected to significant withdrawal volumes. Consequently, FTT’s price movement weakened.
Effect of FTX Downfall on Solana
Tokens that FTX Ventures and Alameda Research had invested in, most notably Solana, have become the target of FUD as a result of FTX’s bankruptcy. Last week, Solana-based DeFi protocols’ total value locked (TVL) fell 63% from $1 billion to little over $370 million. The price movement of SOL, which is down more than 33% during the same time period, reflects the decline in TVL. Solana has experienced numerous outages, exploits, and other attacks over the course of the year; the impact of FTX may be the final straw that stunts the expansion of the token and DeFi ecosystem.
CRO falls by 30%
Crypto.com’s CRO token has decreased by almost 30% as a result of the FTX issue. The exchange “accidentally” transferred over 300,000 ETH, valued at $360 million, to Gate.io. Many of its users attempted to remove their tokens from the exchange.
Magic Mirror A New Optimism Tool
Last week, Optimism ecosystem developers developed a tool called Magic Mirror that enables owners of Optimism-based NFTs to mirror their NFTs on the Ethereum mainnet. The goal of this project was to make it possible to employ Optimism NFTs on web2 platforms like Twitter and Facebook that already support Ethereum NFTs. The Optimism Foundation advocated for the development of Magic Mirror in an effort to stoke interest in layer 2 scaling solutions for Ethereum.
— Crypto Price Weekly Recap —
Bitcoin Price Recap
Risk aversion and the fear generated by FTX’s bankruptcy dominated early-week trading. Before the market started moving in a downward direction, bitcoin opened at a price of 20,900. The 19,650 support broke under pressure from persistent and forceful selling. BTC fell to multi-year lows of 15,632 by midweek. Despite a change in attitude that occurred toward the end of the week, the 18,000 level was refused, indicating that it is still relevant as near-term resistance. Price fell again over the weekend, closing at -21.96%.Amid the current market turmoil, concerns regarding counterparty risk and the security of funds have arisen.
ETH Price Recap
The FUD created by FTX turned the cryptocurrency market into a mess. Ethereum retested the topside resistance at 1,610 to start last week’s trading. But as fear, uncertainty and doubt spread throughout the market, it flowed into Ethereum, driving the price down and under the 1,330 level of support. The 1,072 support was notably well-defended, demonstrating its durability as support going ahead. Later, Ethereum rose further alongside Bitcoin but encountered resistance at the previous support level of 1,330. Action is anticipated to stay range-bound going forward, with any additional insolvencies likely to cause volatility.
BNB Price Recap
At the beginning of the week everything looks good for BNB despite the FUD but at the end of the week everything was the opposite. BNB opened the week at $337 and had the week’s high at $399 but everything became sour as the FUD caused a heavy selling pressure. This led to BNB closing at $276 losing 18% from the week’s opening price.
FTM Price Recap
Cryptocurrency as a whole had a very bad week and this was due to FTX bankruptcy. The week started well for FTM but it never lasted. FUD caused by FTX caused an heavy selling pressure in Fanthom ecosystem. FTM closed the week at $0.167 losing 32% from the week’s opening price.
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