Written by 4:37 pm Cryptocurrency

Cryptocurrency Retains Most Of Its Gains After Bouncing Back

Bitcoin prices have had a turbulent week, falling sharply as markets responded to the ongoing developments surrounding troubled exchange FTX but then recovering and managing to hold on to the bulk of their gains.

The world’s most prominent currency stood at $20,759.24 at approximately 9 a.m. EDT on Friday, November 4, CoinDesk data shows.

Later that night, it reached its high point of the week, climbing to more than $21,400, additional CoinDesk figures reveal.

Over the next several days, the digital asset encountered some severe volatility, falling to a two-year low of $15,625 on November 9, CoinDesk reported.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

In the next few days, bitcoin prices rallied, climbing to more than $18,100 yesterday afternoon on CoinDesk, representing a roughly 16% increase from the intraweek low of close to $15,600.

Following that upward movement, bitcoin fell back, approaching $17,000 late last night and trading at $17,228.50 around 9 a.m. EDT today.

FTX’s Ongoing Saga

Bitcoin prices experienced these fluctuations as market participants responded to a series of developments involving FTX, where the Bahamas-based exchange’s uncertain situation seemed to change quite a bit in a short period of time.

Earlier this month, CoinDesk reported that Alameda Research, a trading firm founded by FTX founder Sam Bankman-Fried, held more than one-third of its $14.6 billion worth of assets in either FTT, the native token of FTX, or “FTT collateral.”

This development helped provoke concerns about the nature of the relationship between FTX and Alameda, its sister company.

Market participants responded, withdrawing approximately $6 billion’ worth of funds from the platform in a 72-hour window before the morning of Tuesday, November 8, Reuters reported.

Bankman-Fried, along with other people he worked with, subsequently started looking for an acquisition partner, contacting various parties, CoinDesk reported.

Changpeng “CZ” Zhao, founder & CEO of Binance, announced on Twitter the same day that Binance had signed a nonbinding letter of intent with the exchange, stating that the objective of this move was to “fully acquire FTX.com and help cover the liquidity crunch.”

However, less than 48 hours into the due diligence process, at roughly 4 p.m. EST on November 9, Binance announced on Twitter that it would not purchase FTX.

“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com,” a tweet posted by the Binance Twitter account stated.

After Binance walked away, Reuters reported on November 10 that FTX was seeking as much as $9.4 billion in funding, citing an anonymous source who claimed to have direct knowledge of the situation.

FTX Files For Bankruptcy

FTX Group, which includes FTX Trading Ltd. (FTX.com), Alameda Research and over 130 affiliated companies, announced today that it has filed for Chapter 11 bankruptcy protection, according to a company statement posted to Twitter. Sam Bankman-Fried resigned from his position as CEO, allowing John. J. Ray III to assume the top role.

Ray, a lawyer, served as the chairman of Enron after the energy giant filed for bankruptcy, according to The Chicago Tribune.

Previously, FTX had been valued at as much as $32 billion when it raised $400 million in a series C funding round earlier this year, according to the company, CNBC reported.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.

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