Tuesday saw a sharp decline in cryptocurrency prices, and FTX‘s native token had a 15% decline as investors were alarmed by rumors that FTX’s finances were under strain.
By market value, Bitcoin, the most valuable cryptocurrency, was down 4% at $19,750 and was suffering its worst day in almost two months. Ether, the second biggest, decreased by 5%.
Pressure has been put on FTX after the chairman of competing exchange Binance announced on Sunday that his company will sell up its holdings of the FTX token as a result of unnamed “recent developments.”
Sam Bankman-Fried, the founder of FTX, declared that any worries were “false rumours” and that the exchange was “great”. When reached by Reuters on Tuesday, the company declined to respond right away.
The FTX token was last trading at $18.76, down roughly 15%, while data from analytics firm Nansen indicating a $630 million net outflow from FTX in one day showed that account holders were also withdrawing funds.
There are “huge withdrawals out of FTX, across numerous assets,” according to Justin d’Anethan institutional, sales director at digital asset company Amber Group. “FTT is moving south, below a significant support level.”
It appears that investors are liquidating their holdings or withdrawing their money; this week is likely to be chaotic.
To read our blog on “Man scammed of lakhs under the pretext of trading in cryptocurrency,” click here