There is fear in the crypto world that the bankruptcy of crypto exchange FTX will spread to other companies. However, the first bankruptcy report shows that there are billions of debts with large parties.
This fear of the spread of financial malaise leads to falling prices of currencies such as bitcoin and ether.
The fact that crypto companies have borrowed a lot of money is causing concern. Industry experts say BlockFi will be the next company to file for deferment. The crypto financier would already be preparing for this. Critics see the fall of FTX, which ran into money problems because founder Sam Bankman-Fried used customer deposits to make high-risk investments, as a sign that the crypto market needs to be regulated.
Crypto trading houses are withdrawing from the various exchanges. Because money disappears in this way, the prices on the various stock exchanges diverge further. The situation, therefore, looks more like the early years of the crypto world. Then some people, including FTX founder Bankman-Fried, made a lot of money buying digital currencies on one exchange and selling them on another.
This tactic, known as arbitration, has become less and less lucrative in recent years. The large trading houses often managed to profit from the different prices by employing computer-controlled trading. They are now withdrawing for fear of wild price fluctuations. They are also afraid of losing access to their digital currency, as happened with FTX. This results in a direct cost item for speculators.
The largest crypto coins have already lost a lot of value in recent weeks but then had a revival. Bitcoin has lost about 4 percent in recent days to around $ 16,000. Ether lost about 7 percent. The highly speculative dogecoin lost 11 percent.