Bitcoin’s Slide Pauses in Wait for Next Domino to Fall After FTX
Cryptocurrency prices steadied in a lull from the selloff sparked by the demise of Sam Bankman-Fried’s FTX empire, but investors are braced for more ructions as further digital-asset sector bankruptcies loom.
(Bloomberg) -- Cryptocurrency prices rose as investors boost Bitcoin from a session low amid wariness of even established players in the digital-asset sector.
The largest token gained as much as 4.2% Tuesday, snapping the digital asset from its lowest price since November 2020. Ether posted a similar increase, while altcoins like Solana and Dogecoin also rose.
Prices plunged this month after the collapse of Sam Bankman-Fried’s FTX empire. Now, investors are watching other crypto companies to see how far the contagion might spread. Genesis, a digital-asset brokerage, warned of possible bankruptcy unless it can raise cash. Crypto lender BlockFi Inc. is also struggling to stay afloat.
“Bitcoin confirmed a breakdown last week that has bearish implications, but in the near-term it has seen an initial positive reaction to oversold conditions,” said Fairlead Strategies Senior Analyst Will Tamplin.
Money has poured out of exchanges as investors seek the assurance of self-custody, according to a Glassnode analysis.
“With each passing day that these trends persist, it becomes increasingly plausible that a wider scale reduction in confidence is in play,” Glassnode said in its “The Week Onchain” newsletter.
Administrators picking over the wreckage of FTX’s bankruptcy have discovered that $3.1 billion is owed to top creditors. The scope of the money outstanding is stoking worries that more digital-asset outfits will topple.
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