Bitcoin prices fell 75% from peaks. Cryptocurrency Crash Explained

Cryptos had already shed about $2 trillion in value before FTX’s problems surfaced this week as central banks around the world raised interest rates to combat runaway inflation.

Shivam Thakral, CEO of BuyUcoin, said: “The FTX collapse has wiped out over $180 billion from the crypto market as digital assets across the board are under tremendous selling pressure. In the altcoin space, MATIC, AVAX and SOL witnessed double-digit drops in value due to the broader sell-off of crypto assets. According to the latest update, Binance has pulled out of the deal to buy FTX driving investors away from riskier assets.”

“Feedback from private/institutional investors on the withdrawal of their funds from FTX will play a crucial role in market recovery in the coming weeks,” he added.

FTX issues aside, global risk sentiment has moderated slightly as cryptocurrency selling continued, IFA Global said in a note.

“Binance has walked away from taking over FTX and FTX has warned of bankruptcy without an $8 billion infusion. A worse-than-expected showing by Republicans in the midterms also hurts sentiment. Republicans are likely to take control of the House by a narrower margin than previously expected, and the Senate race remains wide open,” the currency advisory added.

The focus will be on the important US October CPI printout today.

Among other asset classes, US stocks capped a three-day overnight rally with the S&P500 and Nasdaq ending with cuts of 2.1% and 2.5% respectively. Asian stocks are trading with a negative bias.

Crude oil prices have fallen for a fourth straight session on US recession worries and as China’s COVID concerns continue to grow. EIA data also showed a significant build-up in inventories, and that is also weighing on crude oil. Gold is steady around $1,708 an ounce.

Meanwhile, Sequoia Capital wrote down the entire value of its holdings in FTX, a signal that the venture capital firm sees no clear path to recoup its investments in the struggling cryptocurrency exchange. The VC firm invested about $214 million last year in FTX’s international and U.S. businesses, Sequoia told its investors on Wednesday. The write-down includes holdings of both FTX.com and FTX.us, a company spokeswoman said. (With agency input)