FTX Exchange’s latest selloff scare is triggering a new round of price slump.
Top market leaders are looking to bid for FTX tokens and assets.

In November 2022 when popular cryptocurrency exchange FTX and its sister trading firm Alameda Research faced bankruptcy as a result of certain allegations brought against Sam Bankman-Fried, the Chief Executive Officer (CEO) at the time, the implosion caused an earthquake in the broad crypto ecosystem with ripple effect still being felt till today. 

After the implosion, investors became less confident in other exchanges including leading digital asset service provider Binance. The Changpeng Zhao-owned exchange saw a sharp decline in its reserve balance as users became skeptical that it could be the next cryptocurrency exchange to go down the drain. 

In addition, prices of cryptocurrencies saw their lowest levels as the crash raised a lot of Fear, Uncertainty, and Doubts (FUD) in the minds of many crypto investors. Within two weeks of the crash, Bitcoin (BTC) price had fallen to around $16,500 but with time, it fell as low as $15,000.

While the broad crypto ecosystem is still trying to fully recover from the contagion of the FTX implosion, it looks like there is another crypto catastrophe looming, courtesy of the same defunct crypto exchange. 

Last week, an Arkham Intelligence study revealed that an FTX wallet sent approximately $10 million worth of Solana (SOL) tokens as well as other digital assets through a Wormhole bridge to another FTX wallet. This movement of funds raised concerns in the hearts of many FTX creditors who were skeptical about an impending selloff.

FTX Holding Selloff Triggers Price Decline

On-chain data have shown that the defunct exchange and Alameda Research holds about $3.5 billion worth of cryptocurrencies including Solana, Bitcoin, Ethereum (ETH), and Dogecoin (DOGE). FTX is looking to liquidate these assets up to $1.8 billion on September 13, should it receive the necessary approval. 

According to a breakdown shared on the X app by blockchain research Collins Brown, FTX holds about $268 million in Bitcoin, $90 million in ETH, $67 million in Aptos (APT), approximately $42 million in Dogecoin, $31 million in TON, and about $29 million in XRP.

The liquidation of these altcoin holdings is likely to trigger a decline in prices for most digital assets that are already faced with four weeks of horizontal consolidation. Bitcoin recently had a brief decline below $25,000. Precisely, the coin went as low as $24,963 in the United States trading hours on September 12. Since mid-June, this is the first time that the leading crypto is going below the $25,000 level. 

There has been a slight recovery in the last 24 hours and BTC is currently trading at $25,791. ETH, TON, ARB, SOL, and XRP are also currently fluctuating sideways. 

Meanwhile, TRON founder Justin Sun is feeling heroic and is mulling the idea of buying FTX’s holding tokens will help save Bitcoin, Ethereum, Litecoin (LTC), and the entire crypto industry from an impending bloodbath. Many netizens do not see the possibility of Sun buying the whole FTX holding but the gesture from him, if permitted by regulators, might help to make a difference.

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Filed under: Bitcoin - @ September 12, 2023 5:23 pm