First Mover Americas: FTX Fallout Heats Up
The latest price moves in crypto markets in context for Nov. 9, 2022.
This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.
Long crypto traders have liquidated over $700 million in the past 24 hours amid the seismic events involving crypto exchange FTX’s proposed sale to Binance, the world's top crypto exchange by volume. Bitcoin and ether have declined by over 11% and 20% respectively, in the past 24 hours, catching many traders off guard. Meanwhile, futures tracking bitcoin and ether saw $390 million in losses due to liquidations in the past 24 hours. The turbulence emanated from concerns about FTX’s solvency following a report by CoinDesk detailing how its sister firm Alameda Research’s balance sheet was full of FTX's native token, FTT, causing a widespread exodus from the asset.
Crypto exchanges have been scrambling to publish their fund reserves to allay investors’ fears over contagion risks following FTX’s liquidity woes. In the past 24 hours, seven exchanges, including Binance, Huobi and OKX, have said they will publish their audited fund reserves to increase transparency. Binance founder Changpeng Zhao urged industry players to provide “proof of reserves” following the FTX debacle.
Stablecoin heavyweights Circle and Tether distanced themselves from FTX hoping to calm fears about the crypto exchange's sudden decline. Circle CEO Jeremy Allaire said that even though Circle and FTX hold small equity stakes in each other, Circle has never given any loans to FTX or received any FTT as collateral. Tether Chief Technology Officer Paolo Ardoino described Tether's FTX exposure as “0. Null.”
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