Over the past two days, the largest token, Bitcoin, has lost around 4% of its value, while Ether, which is ranked second, has lost about 7%. A judge of the most speculative inclination in an already risqué digital playground, the meme token Dogecoin, is down 11%.
Administrators are sifting through the remains of the FTX bankruptcy and have found that the largest creditors are owed $3.1 billion. Concerns that more digital asset businesses would fail are being fueled by the size of the money still owed.
BlockFi Inc., a cryptocurrency lender, could be the next; last week, persons with knowledge of the situation claimed that the company is getting ready to declare bankruptcy soon.
According to Christian Catalini, founder of the MIT Cryptoeconomics Lab, “the FTX difficulties are truly an urgent reminder of the need for regulatory clarity and a meaningful regulatory framework for cryptocurrency.
He continued, saying that the “huge distraction from producing actual products and services that reach consumers and address actual problems” has been caused by excitement and speculative activity surrounding the creation and trading of tokens.
FTX and Ether
Over the past few sessions, Ether has underperformed Bitcoin in part due to rumours that some of the $663 million that FTX lost as it went bankrupt is now being transferred out of the token.
With a haul of around $288 million, the individual or organization that raided FTX became one of the greatest holders of Ether in the world last week.
Chainalysis, a blockchain expert, claimed in tweets on Sunday that money taken from FTX “is on the move” and that some of it was moving from Ether to Bitcoin, perhaps in an effort to “pay out.”
A 72% decline in a gauge of the top 100 tokens over the past year, along with the heady combination of company failure and suspected crime, is understandably raising a lot of concerns about the future — or lack thereof — of digital assets and the underlying blockchain technology.
Bill Ackman, the founder of Pershing Square Capital Management, stated on Twitter that cryptocurrencies make up less than 2% of his total assets but that he remains optimistic about the industry as a whole and likens its potential social impact to that of the telephone and the internet.
Cryptocurrency “Amateurs”
As of 11:45 a.m. in Singapore, the price of bitcoin was roughly $16,000, a significant decline from its all-time high of about $69,000 set in November 2021. The price of ether was roughly $1,120.
Bobby Lee, the founder of Ballet Global Inc., a provider of cryptocurrency storage solutions, said, they have got to go past this early stage of amateurs in crypto. If there are any other significant market blowups, he continued, Bitcoin might drop as low as $10,000.
