Join Our Telegram channel to stay up to date on breaking news coverage
The past couple of weeks have been very turbulent for the crypto industry with FTX, one of the largest crypto exchanges collapsing. This entire phenomenon did not just affect the prices of FTT, which is the platform’s native token but almost every other crypto in the market. Evidently, even top cryptos suffered a great deal of loss with the entire FTX phenomenon unfolding. Investors have been looking for a Bitcoin price prediction too, in order to see how this has impacted the frontrunner crypto.
In fact, the prices of Bitcoin hit a new 23-month low on Wednesday while news surfaced that Binance might not acquire FTX. Consequently, this resulted in Bitcoin’s prices reaching a new low below the $17000 mark for the first time since November 2020.
Fortunately, Bitcoin has a robust foundation and is still the leader in the crypto world without any solid competition. This made it easier for the token to regain its worth and cross the $17000 mark again. But does this mean Bitcoin will reach the $18000 mark again?
What Went Down With FTX?
FTX is known as one of the largest crypto exchanges available in the market with its native token, FTT. Things were going great for the FTX exchange at the start of the year to the extent that FTX’s CEO, Sam Bankman Fried, offered to buy many exchanges going bankrupt in this bearish market.
However, this did not last long after a news report highlighted severe concerns with FTX’s liquidity. The report stated that FTX’s trading company, Alameda Research, had a significant asset holding of FTT tokens. This meant liquidating these tokens would be almost impossible without shutting down the company.
This became a major concern for FTX customers as the company had taken a number of loans with Alameda’s assets as collateral.
Following this development, Binance announced that it would go on to liquidate all its FTT holdings. It is worth mentioning that Binance is one of the most significant investors in the company. So having your largest investor liquidating their assets was not good news for FTX for obvious reasons.
All these factors pushed traders and investors into a panic mode, further triggering a panic sell-off in the market. People started withdrawing all their assets from the exchange, significantly reducing their trading volume.
Unfortunately, FTX did not do much to reassure their users, but they only made things worse by stopping all withdrawal processing services on the exchange. This made traders and investors fear that their favourite exchange might go bankrupt. Even worse, FTX CEO Sam Bankman-Fried did very little to reassure their users while all of these were unfolding. The CEO tweeted on the matter later, but this was too little and too late to make any difference.
This went on for a while until another announcement came from Binance that they would be acquiring FTX. Soon Binance furnished a letter of intent that they wanted to help FTX and its users with their liquidity crunches. The same was then confirmed by the CEOs of both exchanges, who echoed similar sentiments.
But unfortunately, Binance recently changed its mind and is now pulling out of the deal. This was confirmed with an announcement that even though Binance had the intention to save FTX and its users, the liquidity issues were beyond anyone’s ability to help. While all of these were going on, the prices of Bitcoin fell further along with almost every other crypto token in the market.
Why Did Binance Scrap The FTX Takeover Deal?
When Binance announced that it would be acquiring FTX, many traders and investors took a sigh of relief. But this peace did not last long as Binance later stated that it would not go through with the deal.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
The letter of intent that Binance signed earlier clarified that the company will need to do its due diligence before completing the deal. Upon due diligence, Binance came across many issues in the books of FTX. The exchange cited some severe concerns with FTX’s accounts, leaving them no other option but to scrap the deal altogether.
Many officials from Binance who chose to remain anonymous described FTX’s books as a black hole. They further added that there was no way to make a distinction between the assets and liabilities of the FTX exchange as well as its subsidiary Alameda Research hedge fund.
What’s Next For FTX And Its Users?
It is now very clear that FTX is in knee-deep trouble. On Wednesday, the FTX CEO Sam Bankman-Fried asked investors for a whopping $8 billion to cover all the withdrawal requests. However, the way things are unfolding, it does not look like FTX will be able to acquire such a huge sum of money anytime soon.
The troubles are starting to pile up, as US authorities are now in full swing to investigate FTX. According to news reports, authorities from the state of California and the federal authorities are now investigating how FTX handled its customers’ deposits. Currently, there is nothing much FTX users can do but wait and see how these events unfold with time.
Bitcoin Technical Analysis- Price Prediction
Of course, 2022 has not been a great year for Bitcoin and the crypto industry. In fact, Bitcoin had recently reached a new low going below the $16000 mark for the first time in almost two years.
However, Bitcoin is still one of the most powerful cryptos, which becomes evident with the rising prices of this token. Despite everything going on in the market, the prices of Bitcoin are rising again, and it recently exceeded the $17000 mark again before going back down in price. So, if things go on as it is, chances are Bitcoin might reach the $18000 mark once again.
Choose Safety Over Volatility
The price of Bitcoin has been increasing recently, but there is no certainty that this bullish trend will continue. In such situations, taking calculated risks with tokens still performing well amidst the bearish sentiment is better.
Tokens such as Dash2Trade (D2T) have performed relatively well despite the entire crisis. Calvaria is an excellent example of recently launched projects in the play to earn sphere giving new opportunities to traders and investors.
Finally, there is RobotEra with its native token, $TARO, which recently raised a hard capital of $6,930,000. Naturally, in a situation like this, it would make the most sense to invest in options like these, where the projects are high in popularity as well as fundamentals.
Read More:
Join Our Telegram channel to stay up to date on breaking news coverage
