Bitcoin cryptocurrency lost a lot of its value on Tuesday. The cause seems to be the news surrounding the potential takeover of crypto exchange FTX by its rival Binance.
On Sunday, Binance boss Changpeng Zhao tweeted that his platform would eliminate all of its competitor’s FTT digital tokens “following recent revelations.” That led to a crash in the value of the FTX tokens. As a result, many investors withdrew their money from the platform, and FTT lost almost 80% in value in a week.
On Tuesday, Zhao then stunned the crypto world by announcing that his company is acquiring FTX. According to Zhao, the competitor faced liquidity problems, possibly due to the rush of investors looking to collect their money. As a result, FTX saw no choice but to be acquired by Binance. The latter is the largest crypto platform in the world, with more than $14 billion in transactions in 24 hours, according to the statistics site CoinGecko. FTX.com is number four.
However, the agreement signed between the two for the acquisition would not be binding, fueling another jitter in the crypto market, especially since Binance could decide to walk away from the deal without too much trouble. This ensured that bitcoin and other cryptocurrencies lost a lot of value.
Bitcoin lost nearly 15 percent, pushing the currency below $17,500. Tokens like ether, polkadot and avalanche each fell more than 14 percent. Solana and dogecoin lost over a quarter. The FTX and Binance issue sparked flashbacks among some traders to the past troubles surrounding Celsius, the crypto lender that went under earlier this year. Other companies were also affected by the market crash.
