SINGAPORE : Cryptocurrencies were jittery and groping for a floor on Wednesday, after a sharp and broad drawdown when nerves about the stability of exchange FTX turned to a rush of withdrawals and ultimately a bailout deal from bigger rival Binance.
Pressure on FTX came in part from Binance CEO Changpeng Zhao, who had said on Sunday that Binance would liquidate its holdings of the rival's token due to unspecified"recent revelations." Kami Zeng, head of research at Fore Elite Capital Management, a Hong Kong-based crypto fund manager, termed this another"alarm warning" for the battered cryptocurrency market and said investors should be cautious for a while.
Analysts drew parallels with the collapse of Terraform Labs earlier this year after its stablecoin, TerraUSD, dived, setting off a series of other bankruptcies at Singapore fund Three Arrows Capital and U.S. fintech firms Voyager Digital and Celsius. "It's probably safe to expect this move will further consolidate their lead, as FTX was a top-10 player with a sizeable share of volumes," he said.