The global crypto market is facing a significant downfall today due to the latest economic turmoil, with losses of up to 11.02% in its market cap. This dramatic decline has been attributed to market contagions such as FTX’s “liquidity crunch,” among other issues which are affecting the industry globally.
On November 9th, the global crypto valuation plummeted from its key mark of $1 trillion back to just below the $900 mark, at $871.47 billion. Almost all cryptocurrencies saw price crashes today, even major currencies plummeting sharply and suffering huge losses over the last 24 hours.
Bitcoin, the currency with the largest market valuation, lost its previous position of holding the $20,000 threshold yesterday and dropped dramatically to $17,000. As per CoinMarketCap’s data, BTC is currently trading at $17,664.07, with almost an 11% loss in the last 24 hours.
Similarly, Ethereum, the second-largest currency, missed its crucial milestone and plunged sharply to $1,259.44 within the same time frame. ETH is presently trading at $1,214.31, down almost 19% over the past 24 hours and 21.87% for the past seven days.
The majority of well-known altcoins are also seeing significant losses on both the daily and weekly charts, with XRP losing 15.63% of its value in a day, Dogecoin losing over 17.03%, Polygon losing 21%, and Solana losing 35% in the last day and over 40% in the previous seven.
The top in line is FTX’s token FTT which had lost about 74% in the last 24 hours and is currently trading at $4.68. The token dramatically fell from $22 to $3 in a single day. However, the movement in attitude toward bearishness may result from the investor’s fears that the ongoing FTX issue may cause a crypto crash similar to Terra.
Factors Sparking Crypto Market Volatility
Market volatility seems to be due to concerns over the FTX balance sheet. Crypto exchange FTX’s FTT token had a collapse on Monday when it was revealed that Binance, one of the world’s largest cryptocurrency exchanges, would be liquidating all its holdings of the FTT token.
On the other hand, Binance’s CEO unexpectedly revealed Tuesday that they would now be purchasing FTX.com. According to the CEO’s tweet, the company has signed a non-binding agreement to buy it to help FTX deal with a “liquidity crunch.”
According to the Reuters report, $6 billion had been withdrawn from FTX over the last 72 hours before Tuesday morning. This information came from an email from the exchange’s CEO, Sam Bankman-Fried, to their staff.
Another market-affecting factor is that after the FTX crisis, regulators may begin to step up strict enforcement, as signaled by BaFin announcing they are looking into Coinbase’s business practices.
Following German banking legislation, BaFin (Germany’s Federal Financial Supervisory Authority) issued an order on September 27th to Coinbase to “ensure proper business organization.”
On November 8th, the exchange was notified of violating the act by neglecting proper business operation as stipulated by the German Banking Act. Nevertheless, investors’ concerns about the cryptocurrency market as a whole are growing due to such uncertainties.
Related Reading | FTX Conflict Drives 2 More Firms Away From The Exchange
