Bitcoin, ethereum and other major cryptocurrencies tumbled this week, wiping billions of dollars from the combined crypto market and sending it below the closely watched $1 trillion mark.
Bitcoin price crashes below $20,000 per bitcoin, down 6% in last 24 hours, while ethereum price and other top ten cryptocurrencies BNBBNB -4,2%, XRPXRP -5,6%, cardano, solana and dogecoin lost between 3% and 15%.
Now crypto exchange FTX, run by billionaire Sam Bankman-Fried, has reportedly stopped processing withdrawals - sparking "mass panic" and sending FTX's FTT down by 30%, after as CEO of a competitive exchange issued sharp warning .
"The mass panic surrounding FTX's solvency has caused investors to hastily withdraw their assets from the platform, which FTX is clearly struggling to cope with," Markus Sotiriou, an analyst at digital asset broker GlobalBlock, wrote in an emailed note.
The Block reported , that FTX stopped processing withdrawal requests around 6 a.m. ET, citing data from the ethereum blockchain. FTX did not immediately return a request for comment.
Over the weekend, Binance CEO Changpeng "CZ" Zhao sent shockwaves through the Bitcoin and crypto community when he announced that Binance was liquidating its holdings of FTX's FTT cryptocurrency, a rival to Binance's own much larger BNB, citing "recent revelations" about FTX and the Bankman-Fried Alameda Research Trading Company. Last week Coindesk reported that Alameda Research's balance sheet was loaded with FTT of FTX, making it highly illiquid.
"Whether these are just short-term liquidity issues due to the speed of withdrawals or a more fundamental problem remains to be seen," Sotiriou added. "However, the silence of FTX CEO Sam Bankman-Fried is deafening and creates further fear. The FTX token FTT is down 30% to $15 at the time of writing, but an announcement from FTX could lead to a short squeeze”—where bets against an asset fail and lead to a sudden spike in price.
Bankman-Fried tweeted yesterday that “FTX is fine. Assets are fine.”