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Crypto market bleeds out $100 billion in FTX drama aftermath

Crypto market bleeds out $100 billion in FTX drama aftermath

After the developments surrounding one of the largest cryptocurrency exchanges sent shockwaves across the crypto sector, most of its participants continue to count their losses, with the market as a whole losing tens of billions of dollars.

As it happens, the carnage following the FTX drama has inflicted a grievous wound to the crypto market capitalization, bleeding it by more than $100 billion in a day, as per data retrieved by Finbold from CoinMarketCap on November 9.

Specifically, the global crypto market has dropped from $983 billion to $880 billion during the previous 24 hours, which means it has lost $103 billion or more than 10% during this period and $110 billion across the week.

Total cryptocurrency market cap 24-hour chart. Source: CoinMarketCap

Notably, the most significant decline happened hours after it became known that FTX was on the verge of collapse, with the market plummeting from its highest point of $1.027 trillion to as low as $827 billion.

Crisis begins

As a reminder, the crisis began after it was revealed that the balance sheet of Sam Bankman-Fried’s trading firm Alameda Research mainly consisted of the FTX Token (FTT), demonstrating a close connection between the two parts of his business empire.

In response to this revelation, Binance liquidated $500 million worth of FTT on November 6, putting FTX in a bit of a liquidity crunch, and initiating some bickering on Twitter between the two, which OKX CEO warned could have devastating consequences.

As a result, the FTX token sank as much as 80% in a single day, wiping almost $2.5 billion from its market cap, as Finbold earlier reported.

Crisis averted?

However, in a surprising turn of events, Binance reached out to its competitor on November 8 by making a non-abiding agreement to acquire FTX in a bid to help it recover and stop the crisis from spreading across the industry after the crypto exchange asked for assistance.

That said, the damage already seems to be done, as the effects of the crisis have spilled over onto all other assets, including Bitcoin (BTC), which has dropped more than 9% on the day and is now trading at $17,917.

Bitcoin 24-hour price chart. Source: Finbold

It remains to be seen how much Binance’s most recent actions will help alleviate these consequences as uncertainty continues to surround the market.

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