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Bitcoin at 2-year low, drops below USD 16,000-mark as crypto exchange deal collapses

Bitcoin’s price has dropped below the $16,000 threshold for the first time in almost exactly two years. Up until about a year ago, the average price of a Bitcoin was roughly $69,000. The cryptocurrency exchange known as Binance pulled out of an agreement to purchase another cryptocurrency exchange known as FTX, which is widely seen as the primary factor for this drop.  If this deal does not go through, FTX will be forced into the realm of bankruptcy.

If Binance’s CEO is to be believed, he cannot fix FTx’s issues. The primary reasons for Binance’s withdrawal are the scrutiny of US investigative authorities and FTX’s inappropriate handling of customer funds.

After Binance backed out of the deal, FTX currency began offering FTT for sale.  Prior to the beginning of this year, it was estimated that FTX had 32 billion dollars in annual revenue.

VC firm Sequoia Capital has written down its $210 million stake in FTX. Due to Alam, FTx does not have the required $8 billion to fulfil the withdrawal request. When word spread about FTX’s problems, investors began selling out crypto.

Major crypto coin prices plunged, with bitcoin falling to its lowest level in over two years, adding insult to injury for a market that has lost around two-thirds of its worth this year due to central bank lending restrictions.

Binance had already averted regulatory scrutiny that would have followed the buyout, which Zhao had warned of in a note to staff that he shared on Twitter before the company abandoned the transaction.

People are selling in an effort to regain their financial footing under mounting pressure. Due to the FTX disaster, the cryptocurrency industry lost $150 billion.

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In light of the fact that many more exchanges are reportedly on the brink of insolvency, the price of cryptocurrency may trend around $10,000, say experts.

Financial agencies throughout the globe have issued warnings against Binance for operating without a licence or breaking money laundering regulations. The U.S. Department of Justice is looking into allegations that Binance broke laws regarding money laundering and criminal penalties.

(With inputs from Reuters)


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