Passakorn Prothien
Bitcoin (BTC-USD) fell below $16k as the broader crypto space came under increased pressure from the boom of centralized crypto exchange FTX. The bearish action also occurred after the risky trade in stock market.
Digital tokens, known for their exceptional volatility, have slipped 4.5% to $15.77k by 3:15 p.m. ET, from a November 2021 high of $68.9k. Ethereum (ETH-USD), the world’s largest altcoin, has dropped in price 6.4% to $1.10K and other major cryptocurrencies like binance coin (BNB-USD) -6.7%cardano (ADA-USD) -6.6%dogecoin (DOGE-USD) -ten% and polka dots (DOT-USD) -6.2% also changed hands in a sea of red.
The global crypto market cap, as high as $3 trillion in November 2021, stands at just $790.3 billion at press time, according to CoinMarketCap data.
Amid the FTX crash, cryptocurrencies have been hit much harder than stocks, which have also fallen on the day, with all three Major US stock indexes do business in negative territory.
With the downward pressure on cryptocurrency prices increasing, liquidity on centralized exchanges also seems to be diminishing. For example, “liquidity on Gemini remains very poor since the FTX/Alameda crash,” wrote research director Kaiko Clara Medalie on Twitter. parcel. “The average spread for the #BTC-USD pair has increased from 2bps to over 6.”
“There has been a sharp drop in liquidity on most crypto exchanges following the collapse of FTX and Alameda,” Medalie told Seeking Alpha. Alameda Research, the trading firm of Sam Bankman-Fried that played a key role in the demise of his crypto empire, “is a major market maker for crypto assets and a lot of Other market makers have been stuck on FTX, so there has been a visible impact on overall liquidity.”
Meanwhile, she noted that “there has been a slight improvement in liquidity over the past week as market makers gradually redeploy capital on exchanges.”
Recalling the lending activity of crypto broker Gemini redemption is paused and new loans began last week when the collapse of FTX resulted in “irregular withdrawal requests that have exceeded our current ability to pay.”
Elsewhere, $10.5 Billion Grayscale Bitcoin Trust (GBTC-USD), down 2.4%saw it Exemptions compared to the underlying price of bitcoin (BTC-USD) expanded to a record 45% on Friday, Bloomberg reported, suggesting that market participants have seen a worse drop in GBTC than BTC itself. Indeed, GBTC stock has fallen 77% over the past year, while BTC plunges 65%. Check out Seeking Alpha collaborator Paulo Santos evaluate, evaluate, evaluate on why the discount of GBTC to BTC is only increasing.
No wonder crypto-related stocks sold off during the session: Marathon Digital (MARA) -16%Riot Blockchain (VIOLENCE) -9.5%Micro strategy (MSTR) -8.9%Coinbase Global (COIN) -9.7%digital bit (BTBT) -13% and Bitfarms (BITF) -14.3%.
Earlier, (November 19) Coinbase Says FTX Crash Could Extend Crypto Bear Market until the end of 2023.
