BlocksInform
kodzilla0 Comments1 min read
Ftx token ($ftt), which opened the week at $25.77, fell to $2.68 from losing 90.9% in the space of a difficult week which has the bankruptcy depository company.
In the last occurrence, ftx declared bankruptcy for ftx.com, ftx us, alameda search, and approximately 130 affiliates. Meanwhile, the CEO, Sam Bankman-fried, resigns even if he stays to help with the transition.
Press Release pic.twitter.com/rgxq3QSBqm
— FTX (@FTX_Official) November 11, 2022
Incoming CEO, John J. Ray III, said filing for bankruptcy is ‘appropriate’ to provide FTX the opportunity to develop a process to maximize recoveries for stakeholders, adding FTX has ‘valuable assets that can only be effectively administered in an organized, joint process.’
The market continues to take blows of the situation with Bitcoin declining by 3% in the past 24 hours. News of a bankruptcy could further depress the market, in particular the besieged ftx token ($ftt) which has now decreased by over 96% from its deficit of $84.18 in September 2021.
The $ftt token is at the heart of the crisis with the revelation that it occupies a large portion of the alameda sister company looking balance sheet frighten investors and merchants.
Key events during the week that impacted sentiment to further impact FTT’s price include:
- Nov 6 2022: BINANCE announces it would be liquidating its $FTT holdings
- November 8, 2022: FTX suspends payments.
- Nov 10 2022: Reports of SEC investigating FTX
- Nov 11 2022: Binance backs out of deal to acquire FTX
- Nov 11 2022: FTX CEO resigns as FTX files for bankruptcy
Similarities have immediately risen between $FTT and $LUNA crash which also lost all of its value in the space of a few days back in May 2022. However, the present situation seems less harmful, at least for the time being.
A way to compare financial losses is to use the losses achieved. The loss recognised on the sale of assets at a price below the initial purchase price. A realized loss occurs when an asset that has been purchased at a level called cost or carrying amount is then paid for less than its carrying amount.
On November 9, 2022, the total realized loss from the benefits of the FTX project amounted to approximately $1.5 billion. However, with the lunar crash, the market would become more eventful in the suites as visualised by the peaks on the chart below:
It is not yet clear what trickle-down effects ftx's bankruptcy will have in the coming weeks, but terra's bankruptcy has precipitated the bankruptcies of the entire industry. Organisations affected at the time included celsius, blockfi, traveling, and three capital arrows.
See also
Still, while Bitcoin dropped to $17,600, a 2yr low, in June 2022, the FTX crash has driven Bitcoin down past $16,000.
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