Bitcoin fell to a two-year low on Tuesday as the cryptocurrency market took a beating following the collapse of major exchange FTX.
Bitcoin fell to $15,480 on Nov. 11, its lowest level in 2020, according to CoinDesk data. The digital coin has since bounced from that low and was trading at around $15,909.00 at 8:12 a.m. ET.
This year has been tough for the cryptocurrency industry, with failed projects and a liquidity crunch leading to a loss of more than $1.4 trillion in value. This was made worse by the fall of FTX, one of the world's largest exchanges.
Crypto's latest issues began after Changpeng Zhao, the CEO of Binance, said his exchange would sell its FTT tokens. FTT is the native digital currency of FTX's crypto exchange. Binance's move sparked the collapse of FTX, a company once valued at $32 billion. FTX has since filed for bankruptcy.
To make matters worse, hackers stole around $477 million of cryptocurrency from FTX. The majority of the stolen cryptocurrency has been converted into the digital coin ether. However, the hackers have begun to launder that money into bitcoin. The selling of ether by the hackers has caused the price of ether to be under pressure.
Ether prices were down nearly 2% early Tuesday, trading at around $1,109.55.
FTX could have over a million creditors. It owes more than $3 billion to its top 50 unsecured creditors by itself.
Sam Bankman-Fried, the founder of FTX, stepped down as CEO earlier this month and was replaced by John Ray III. This followed a scandal in which Bankman-Fried was accused of plagiarism.
Ray is looking to sell or restructure FTX's global empire. This would include selling off some of the company's assets or changing the way the company is run.
Bankman-Fried is still holding out hope that he can broker some sort of deal to bail out FTX, CNBC reported.
Crypto prices are under pressure as investors fear the FTX collapse could cause contagion across the industry.
Earlier this year, the collapse of a so-called algorithmic stablecoin terraUSD sent shockwaves across the crypto world and contributed to the fall of other entities such as hedge fund Three Arrows Capital. The incident highlights the risks associated with investing in digital currencies and the need for greater regulation in the space.
Investors are concerned that FTX's failure could have similar ripple effects.
As a leading independent research provider, TradeAlgo keeps you connected from anywhere.