Bitcoin Slides Anew After FTX Bankruptcy Filing

Cryptocurrencies across the board dropped sharply on news that troubled crypto exchange FTX filed for bankruptcy and CEO Sam Bankman-Fried left the company. The crypto market lost its $1 trillion market capitalization, dropping 18.3% to $803 billion.

Bitcoin (BTC) dropped about 7% to a 24-hour low of $16,351 during early U.S. trading hours. The CoinDesk Market Index (CMI) of 162 digital assets slid 3.3%, leaving it down 16% in November.

The decline partially reversed a big rally on Thursday, when a report showing slower-than-expected inflation in October gave bitcoin traders some relief. The largest cryptocurrency shot up about 10%, the biggest daily gain in two months.

As the bitcoin price has tumbled, many speculators have homed in on Michael Saylor’s MicroStrategy, and the losses likely to be adding up on the company’s bitcoin holdings, eating away at the company’s equity – and whether a capitulation might be in the offing.

In an interview with CNBC, Saylor said that bitcoin is still 33% higher than when he first bough it in 2020 and that he will continue to purchase and hold the asset. "Our shareholders are winning, and we're going to stick with that strategy because it's working for us,” he said on Thursday.

Previously, Saylor acknowledged that the company would struggle to have enough bitcoin as collateral if the price dropped below $3,562, but that they could post other assets if that happened.

The FTX exchange's in-house token (FTT) – where the crisis of confidence first began to appear early this week in digital-asset markets – dropped another 33%. Huobi token (HT), which briefly gained 400% on Thursday amid news that Tron-based tokens would be redeemed 1:1 from FTX, fell 15% on Friday; Tron leader Justin Sun is a global advisor to Huobi and owns HT tokens. Dogecoin (DOGE) dropped over 11%.

The Solana blockchain’s SOL token fell 14.3% to $16.25. The SOL tokens were a major holding of Bankman-Fried's Alameda Research trading firm. Its token has been rocked by volatility over the past few days.

UPDATE (Nov. 11, 2022, 16:46 UTC): Updates prices.

UPDATE (Nov. 11, 2022, 17:59 UTC): Adds information about Michael Saylor.

UPDATE (Nov. 11, 2022, 21:00 UTC): Adds information about the drop in crypto's total market cap.