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Di prices of cryptocurrencies continue to drop for di second day on Wednesday, as investors continue to worry about di stability of di sector.
Di financial health of major crypto exchange FTX dey give crypto investor cause for worry even though im bigger rival Binance dey plan one rescue deal.
Crypto giant Binance sign one nonbinding agreement on Tuesday to buy FTX international unit – dis np include di U.S. unit – to help cover "shortage of money" wey di rival exchange dey face.
Di propose deal between di two big rivals dey come afta one week of speculation about di financial condition of FTX wey lead to di withdrawal of $6 billion within 72 hours before di Tuesday deal.
Dis raise questions about how sound one of di world largest crypto exchanges.
FTX and Binance no gree tok di condition of dia agreement, and di market no sure weda or not di deal go happun.
Investors begin withdraw dia money on Sunday morning afta several tweets from Binance CEO Changpeng Zhao, say im company go sell dia share of FTX native token, FTT due some kain worrying revelation wey dem get concerning di company.
FTX founder, Sam Bankman-Fried, reply Zhao tweets say Binance dey “try to go afta us wit false rumours,” and insist say FTX “assets dey fine.”
Di revelation wey Oga Zhao dey tok about na one report wey tori pipo CoinDesk publish for early November about Sam Bankman-Fried oda business, trading company Alameda Research.
FTX and Alameda na two separate companies.
Di CoinDesk report say, one “private financial document” wey e see show say FTX native token dey for Alameda balance sheet.
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If CoinDesk informat correct, e mean say around one third of Alameda $14.6 billion asset na crypto coin wey FTX create. E also mean say di two companies no dey independent of each oda as dem claim and dem two get shaky foundation.
Dis revelation follow make FTT plus oda crypto price drop.
Bitcoin, di biggest cryptocurrency by market value, drop 5.3% in price inside one day to $17,559 around 11:07am, after e drop 10% on Tuesday dis make am di worst day since mid-August. Etherum, di next biggest, continue im loss on Wednesday to hit im lowest since July.
Wia dis foto come from, Getty Images
"What if di deal no go through, or (Binance CEO Changpeng Zhao) come back and say I go give 10c on di dollar. Dat na di blind spot wey di market no ready for," Scottie Siu, investment director for Axion Global Asset Management for Hong Kong, tok.
Di confusion for FTX na di latest sign of trouble for di fast-moving world of cryptocurrencies.
Crypto prices don collapse so far dis year sake of wahala for di financial markets wey make investor dump riskier assets.
Afta e grow sharply for 2020 and 2021, bitcoin price don fall around 62% for 2022.
Kami Zeng, head of research for Fore Elite Capital Management, one Hong Kong-based crypto fund manager, say dis na anoda "alarm warning" for di market and say investors suppose dey careful for some time.
"… di whole tin still look like dark hole. We no sure how infectious dis fit be, but I believe institutions need to show dia proof of reserves ASAP. Confidence no go recover before dat," Zeng tok.
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