Cryptocurrency prices today crashed after crypto giant Binance signed a nonbinding agreement on Tuesday to buy FTX's non-U.S. unit to help cover a 'liquidity crunch' at the rival exchange, in a stunning bailout that raised fresh concerns among investors about cryptocurrencies. The move is the latest emergency rescue in the world of cryptocurrencies this year, as investors pulled out from riskier assets amid rising interest rates.
Major cryptocurrencies initially rallied on the news of the deal on Tuesday, but those gains were quickly erased. The world's largest and most popular digital token Bitcoin's price today was trading more than 12% lower at $18,204. On the other hand, Ether, the coin linked to the ethereum blockchain and the second largest cryptocurrency, also tumbled by more than 16% to $1,312.
The global crypto market cap today slipped below the $1 trillion mark, as it was almost down over 11% in the last 24 hours to $952 billion, as per CoinGecko.
"Most cryptocurrencies recorded double-digit losses in the past 24 hours, reacting to the moves made by FTX and Binance. Bitcoin reached a yearly low at $17,166. Despite the US Fed's interest rate increase, BTC has maintained an impressive performance by keeping the bar above the $20,000 level, but it dropped significantly on Tuesday. The second largest cryptocurrency, Ethereum, also fell to its support level at $1,300. Other top cryptocurrencies by market cap are also following a similar trajectory. The coming days would be crucial for the entire crypto spectrum," said Edul Patel, CEO and Co-founder, Mudrex.
Meanwhile, dogecoin price today was trading nearly 24% lower at $0.08 whereas Shiba Inu was also down about 15% to $0.000010. Other crypto prices' today performance also declined as Binance USD, Avalanche, Solana, Tether, XRP, Terra, Tron, Litecoin, Uniswap, ApeCoin, Polygon, Cardano, Stellar, Chainlink, Polkadot prices were trading with cuts over the last 24 hours. FTT, the utility token of crypto exchange giant FTX, collapsed by more than 75% to around $5.27, according to CoinGecko.
"It was a day of rapid developments for the crypto market as the founders of the world's biggest exchanges Binance and FTX entered into a public spat. Binance Founder made a statement that it would liquidate its entire FTT holdings due to growing stability concerns at the FTX exchange. Later in the day, Binance announced that it would acquire the rival FTX which rattled the crypto market and resulted in Binance-led selling pressure. The investors are unsure if the Binance-FTX deal will go through which led to a larger sell-off across crypto assets," said Shivam Thakral, CEO of BuyUcoin.
(With inputs from agencies)
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