Mooners and Shakers: Binance walks away from FTX deal as Solana and rest of crypto market plummets
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Not much mooning in crypto right now. Plenty shaking out, though, very much including Solana. And it’s looking desperate for FTX as Binance walks away from the proposed takeover deal of the smaller crypto exchange.
The FTX debacle is obviously a very fluid situation, but if yesterday wasn’t bad enough, here’s what we’ve woken up to this morning.
As feared by many, Binance, the world’s largest crypto exchange, has announced it’s stepped away from the proposed deal to buy out rival exchange FTX. This comes after corporate due diligence, with Binance also citing negative news reports about “mishandled customer funds” and alleged US agency investigations.
In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.
— Binance (@binance) November 9, 2022
Binance also noted that it wanted to support FTX customers but that “the issues are beyond our control or ability to help,” further commenting:
“Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.”
BREAKING: FTX CEO says bankruptcy is likely without cash injection.
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) November 9, 2022
Meanwhile, FTX CEO Sam Bankman-Fried, who was being touted by Fortune magazine as “the next Warren Buffett” just a couple of months ago, has reportedly (according to Bloomberg) told investors his firm may have to declare bankruptcy unless it sees a fresh injection of cash, tout suite.
— Kevin | 李大仁 🌳 (@kevinvdveer) November 9, 2022
The crypto market, as you’d expect, is a bloodbath today. How much further can it drop? We don’t have that exact answer, unfortunately, but you’d like to think at the very least that the Bitcoin and Ethereum HODLing faithful will remain steadfast.
We’ll check in on some sentiment via Crypto Twitter further below, but in the meantime, here’s a tweet from European Parliament economics committee member Stefan Berger, a proponent of the one-size-fits-all Markets in Crypto Assets (MiCA) regulatory framework currently being proposed for the 27 countries in the European Union.
Berger has compared the FTX collapse to the 2008 Lehman Brothers fall from grace. Someone was bound to make that comment sooner or later. Well done, Bergs, you win the prize.
Shame! The #FTX/#Alameda case has cost enormous trust. Such Lehman Brothers moments must be prevented in the crypto space. That's exactly what #MiCA is for. Crypto assets are not play money. Crypto asset service providers must ensure internal risk management mechanisms. https://t.co/zNrB8CdUbU
— Stefan Berger (@DrStefanBerger) November 9, 2022
Yesterday we did a bit of a roundup grabbing some local Australian crypto industry comment on the FTX debacle. Here’s a bit more, from top one of the country’s leading crypto exchange’s – BTC Markets.
BTC Markets COO Anna Clive told Stockhead the following regarding yesterday’s FTX revelations and FTT token crash:
“It is a sad day for the industry and today’s events clearly articulate the need for regulatory clarity in our space. BTC Markets were incredibly disappointed to learn that FTX experienced a liquidity crisis which has impacted their exchange.
“Our industry, clients and business partners want regulatory assurances around centralised exchange custody requirements, licensing, listing criteria and education. These sureties can only come from clear, reasonable, and responsible regulation developed in partnership with industry participants such as BTC Markets.
“Although the potential loss of client’s funds can create stress, our hope is that this event will force the industry to take another positive direction towards transparency and rigour.
“Trust should be earnt not given freely, and we expect consumers will start expecting more financial transparency from their providers. BTC Markets have been operating since 2013, we are older than Ethereum and our conservative financial management approach reflects our commitment to our client’s financial security.”
Right, time to get our hands dirty by sifting through some price-action wreckage…
With the overall crypto market cap at US$831 billion, down 13% since this time yesterday, here’s the current state of play among top 10 tokens – according to CoinGecko.
Woohoo, there’s some green! Oh, wait, stablecoins. (Sorry.)
It doesn’t get much uglier than this, really. So, once again, thanks a lot SBF and CZ. Good job.
The top 10 all largely speaks for itself, with Bitcoin and Ethereum losing more than a few levels of key support over the past few days. Dogecoin, though, ouch – a near 50% drop over the past week, erasing pretty much all those recent gains on the back of Elon Musk’s Twitter buy.
As for Solana, it’s well and truly out of this club for now, sitting at no, 15 on CoinGecko’s market cap list. We’ll get to that further below.
Even though the most consistently bearish and vocal traders (such as Il Capo, for example) have been calling for another big shakeout of Bitcoin and altcoins, surely they didn’t see the FTX black swan fluttering in and flopping at the market’s feet like this? They’ve been basing their US$14k (and lower) forecasts on the dark arts of technical analysis.
Here are a few some Crypto Twitter analytical takes, then:
Indicators show that the capitulation event is already happening. Expecting last 15% drop on BTC and 30-40% on altcoins. Then the local bottom is in. Probably this week.
— il Capo Of Crypto (@CryptoCapo_) November 9, 2022
This is as clean of a continuation break as you are going to get, and this time we have a catalyst to really send it.
15k might provide brief support, but the next major area for price to settle seems to be around the 12k handle.
Cheap Bitcoin coming. pic.twitter.com/aDDMJIMRDh
— Clark (@CanteringClark) November 9, 2022
Is anyone seeing a glimmer of hope? Here’s Rekt Capital:
In 2017, the $20000 level rejected #BTC into a -85.4% Bear Market
It's 2022 and $20K rejected $BTC again
But this time $20K won't reject BTC as strongly
— Rekt Capital (@rektcapital) November 9, 2022
In the meantime, keep half an eye on the US midterm election results this week (and the US CPI inflation data) No political bias here, however, there is a school of thought that Republican control of the House and/or Senate would be a favourable result for crypto.
If Republicans win the House or both houses, it should be positive for risky #crypto assets.
— Satoshi Club (@esatoshiclub) November 9, 2022
Sweeping a market-cap range of about US$6.3 billion to about US$306 million in the rest of the top 100, let’s find some of the biggest 24-hour gainers and losers at press time. (Stats accurate at time of publishing, based on CoinGecko.com data.)
DAILY, ERM, ‘PUMPERS’
• WhiteBIT Token (WBT), (market cap: US$774 million) +5%
And yep, that’s it.
• FTX (FTT), (market cap: US$375 million) -57%
• Solana (SOL), (mc: US$5.1 billion) -41%
• Lido DAO (LDO), (mc: US$660 million) -32%
• Curve DAO (CRV), (mc: US$349 million) -28%
• Chiliz (CHZ), (mc: US$818 million) -28%
• Quant (QNT), (mc: US$1.57 billion) -28%
• Evmos (EVMOS), (mc: US$416 million) -26%
• ApeCoin (APE), (mc: US$915 million) -26%
• Arweave (AR), (mc: US$444 million) -25%
Solana (SOL), one of the most highly, rated, most used layer 1 blockchains and a chief Ethereum rival, is plummeting as it has ties to the FTX meltdown.
Solana is a Proof-of-Stake chain, and nerves are high regarding the SOL price, partly because nearly US$800 million worth of SOL tokens are set to be available to be unstaked soon.
According to a CoinDesk article, the scheduled staking token unlock (whereby staked tokens become liquid for holders) represents about 15% of the entire circulating supply of SOL.
The fear is, a further dump will occur when this happens, and a possible cascading, capitulation effect on the price of SOL.
Sam Bankman-Fried’s trading and venture firm Alameda Research reportedly holds a significant amount of SOL – apparently it has recently been its second-largest position after the FTT (FTX exchange) token.
Last week, CoinDesk also reported that a copy of Alameda’s balance sheet showed that the firm held US$292 million of “unlocked SOL,” $863 million of “locked SOL” and $41 million of “SOL collateral.”
Meanwhile, the Solana community appears to be attempting to allay fears as best it can right now.
As far as I am concerned not much about Solana has changed the last 48-72 hours from a fundamental perspective. Solana is still innovating.
Just some forced selling, some panic & a lot of fear.
If you turned bearish, what changed besides price?
— S◎L Big Brain (33.3%) (@SOLBigBrain) November 9, 2022
A selection of randomness and pertinence that stuck with us on our morning moves through the Crypto Twitterverse…
Here’s a question. What happens now to all those massive FTX sports sponsorships? Such as NBA legend Steph Curry’s and NFL all-timer Tom Brady’s multi-year ambassadorial partnerships, for instance? Not looking good on that front.
Ah well, at least Brady didn’t ape in too hard with the rest of his football fortune, did he? Er… did he?
Tom Brady really is having a terrible year… https://t.co/JWGOwg7UxM
— Adam Taggart (@menlobear) November 9, 2022
Tom Brady playing to recover his FTX investment (colorized 2045) pic.twitter.com/t7QT1VoVA5
— AlgoFlows | Futures, Equities & Crypto (@algoflows) November 9, 2022
"#Crypto has suffered a liquidity crisis in recent months, with firms like Celsius Network, Three Arrows Capital, and Voyager Digital all collapsing… the bottom will be marked by an even larger industry player going to zero." – Kevin O'Leary (#FTX Investor & Spokesperson) pic.twitter.com/cYr049GTks
— Plan©️ (@TheRealPlanC) November 9, 2022
This Bitcoin, Crypto Slump May Trigger Macroeconomic Dominoes – The breakdown of #Bitcoin and #crypto assets may trigger capitulation sell stops in most markets that have been under pressure this year. pic.twitter.com/p2Uq5pSJye
— Mike McGlone (@mikemcglone11) November 9, 2022
Might be obvious: FTX/Binance #crytpo debacle spilling over to equities
– institutions use #FTX. Now locked assets, so selling “what they” which means stocks to reduce VAR
– ⬇️ #Bitcoin —> used by CTA/algos as cross market signal for equities = down
– fear of contagion
— Thomas (Tom) Lee (not the drummer) FSInsight (@fundstrat) November 9, 2022
— Hsaka (@HsakaTrades) November 8, 2022
Me: "Man, the week can't get any crazier after that LBRY decision, right?"
Crypto: "hold my beer"
— Alex Lindgren (@Alex_LLOYLaw) November 8, 2022
Martin: “So don’t fret.”
— Colin Talks Crypto – CBBI.info (@ColinTCrypto) November 8, 2022
Only in crypto could you have a guest on you show that’s just lost $60B from his own crypto projects to comment on another crypto company that’s lost $14B in value.
— Ben Simpson (@bensimpsonau) November 9, 2022
Inciting unwarranted fear doesn't help this industry.
If all coins were removed from exchanges, your hard wallet Bitcoin would be worth $0 real quick. Yesterday was a bad day, but it's an outlier.
Think about, and diversify, how you hold your assets. Keep calm and carry on. https://t.co/BOkM5jFhHs
— Charles Edwards (@caprioleio) November 9, 2022
This is capitulation. It’s the ultimate test of your true conviction in this space. I saw it in 2018 and seeing it again today. Those that stay will be hugely rewarded. Pick a side! pic.twitter.com/fPc9hiC8qg
— Ran Neuner (@cryptomanran) November 9, 2022
the more hair the ceo has, the more likely their cryptocurrency exchange will fail
it’s science pic.twitter.com/0Ra7pZqxno
— Shibetoshi Nakamoto (@BillyM2k) November 8, 2022