Here's why FTX collapse is dangerous for all crypto users — and who will suffer the most?
panic-selling its reserves of stablecoins. The two giants started attacking each other openly: FTX offered Binance to buy the rest of the FTT stake for $22 per token over-the-counter, but CZ allegedly chose"max pain."FTX and Alameda continued selling their assets in Bitcoin , cryptocurrencies and stalecoins. Bybit CEO Ben Zhou even accused FTX of violating the agreement not to sell BitDAO tokens.
The situation was only getting worse: FTX limited withdrawals, while Bitcoin , Ethereum and all mainstream cryptocurrencies started falling amid the increased uncertainty. As falling assets were used as collateral with DeFis, the protocols reported liquidity issues: for instance, Abracadabra's MIM briefly lost its peg.On Nov.
After a short recovery, Bitcoin dropped to a two-year low below $17,600; this is the most painful price level of the ongoing market cycle.While still being very far from over, the Binance/FTX drama has already unveiled major bottlenecks that threaten the cryptocurrencies segment in Q4, 2022.Centralization is the first and the most dangerous roadblock for crypto progress. The funds of tens of millions people were put at risk due to the business conflict between two crypto moguls.
Then, once the deal is complete, the largest cryptocurrency exchange will acquire the fourth CEX by trading volume — and for sure, Binance will yet again control the lion's share of crypto trading globally. EU and American antitrust authorities have already announced that they will be tracking the acquisition closely, but the segment has never been so close to being a monopoly.FTX's insolvency also affected its investors, i.e., almost all top-league crypto-focused VCs.
FTX US raises $400 million from SoftBank, Paradigm and others in a deal valuing the crypto exchange at $8 billion
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