Bloomberg News reported that the cost of cryptocurrencies was found struggling Monday amidst the prevailing crisis that was triggered due to the downfall of the powerful empire of Sam Bankman-Fried, which was powerful at one point.
It was found that following the above incident, the biggest digital currency, Bitcoin dropped by about 2.5% over the last two days. Simultaneously, Ether, which is ranked second after Bitcoin, was found to be approximately 6% lower. Dogecoin, a meme token, is an arbiter of the nature of the most speculative animus amidst an already racy environment in the digital market, and it was found to drop by as much as 12%.
The wreckage of FTX bankruptcy is being picked up by the administrators, finding that about $3.1 billion is owed to the topmost creditors. The outstanding scope of money is fanning worries that it is likely that more digital asset outfits might collapse.
BlockFi Inc., the crypto lender, might be on close heels. This was stated by people that are familiar with the issue revealed. It has also come to notice that at BlockFi Inc., preparations are underway for filing bankruptcy within a couple of days.
A Hit by Ether
Christian Catalini, the founder of MIT Cryptoeconomics Lab, while talking on Bloomberg TV, said that the FTX matter is an urgent reminder that regulatory clarity is required aside from a real regulatory framework for the crypto industry. He also added that speculation and hype related to trading and minting the tokens had given rise to a massive distraction from developing the actual products and services that consumers receive and when the actual problems are solved.
Underperformance by Ether
Over the past few sessions, there was underperformance by Ether in comparison to Ether in part amidst rampant speculations that few of the $663 million has drained out from the FTX as it dropped into bankruptcy and is now being transferred out of the token.
The entity or the person that carried out the raid of FTX was found emerging last week as one of the biggest Ether holders of the world, with a haul of approximately $288 million.
Chain analysis, the Blockchain specialist, mentioned in tweets on Sunday that funds taken from FTX “are on the move.” Some are also being shifted to Bitcoin from Ether, which is a part of the effort for cashing out.
Bloomberg News reports that the combination of potential criminality, as well as corporate failure atop a 72% drop in a gauge of the topmost 100 tokens over the last year, is resulting in all kinds of questions related to the future, or a lack thereof for the underlying blockchain technology that govern the digital assets.
It was found that Bitcoin was trading at approximately $16,200 in Singapore as of 10 am, which is a far cry from the record high of November 2021 of almost $69,900. Ether hovered around $1,130.
