Crypto-Linked Stocks Plunge on Mounting Fears After FTX Collapse
Shane Neagle | Nov 10, 2022 14:01
Crypto winter is getting even colder this week as FTX, one of the biggest crypto exchanges in the world, stands on the brink of a collapse after a liquidity crunch. Moreover, FTX’s rival and potential buyer of its non-U.S. operations, Binance, decided to walk away from the rescue deal Thursday.
FTX Collapse Could Leave Long-term Consequences/h2
Crypto-exposed stocks, including Coinbase (NASDAQ:COIN), MicroStrategy (NASDAQ:MSTR), Galaxy Digital (TSX:GLXY) and Block (NYSE:SQ), among others, are deeply in the red this week on mounting fears that the FTX event will leave long-term consequences on the crypto industry.
“What is complicating today’s mood on Wall Street is that the liquidity crisis for FTX is spilling over into other cryptos,” Edward Moya, senior market analyst at Oanda, bailed out by FTX in Q2 .
Just like TerraUSD (UST) and LUNA in May, FTX’s price tanked after Zhao announced Binance is liquidating its FTT holdings. The sell-off spilled over to nearly every asset in the digital assets industry, including cryptocurrencies and the aforementioned crypto-exposed stocks.
Summary/h2
The likely collapse of the U.S.-based cryptocurrency exchange FTX has facilitated a massive selloff in crypto-linked stocks on fears investors may lose appetite for digital assets. The short-lived optimism about the recovery quickly disappeared after Binance walked away from the deal to acquire FTX, sending Bitcoin to two-year lows.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.