The crypto market continues to suffer after FTX collapsed. Oddly enough, especially those who are directly related to the exchange are suffering. Many people were wondering which crypto project would collapse next, but they didn’t have to wait long. On November 29, BlockFi filed for bankruptcy. Here’s what we know about it, and how the event affected digital assets.
Grit Capital CEO Genevieve Roch-Decter shared the chronology of events leading up to BlockFi’s bankruptcy on Twitter. On Nov. 10, the day before FTX collapsed, BlockFi announced it was stopping withdrawals. However, according to the expert, the company’s problems started much earlier. In early 2022 when Three Arrows Capital collapsed, the crypto lender suffered about $80K in losses. In July, FTX planned to save BlockFi from bankruptcy, but only if the lender opened a $400M line of credit to the company and an option for FTX to buy BlockFi for up to $240M. But that wasn’t enough.
BlockFi thought the company was being rescued, but FTX made a name for itself on it. Sam Bankman-Fried after that was named in the media as JP Morgan of crypto. Naturally, no one suspected at the time that FTX itself had huge liquidity problems. Thus, BlockFi suffered from three unsustainable lenders (Three Arrows, Luna and FTX).
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What exactly BlockFi’s liquidity problems are is not yet known, but it is estimated that the company has over 100K creditors and liabilities ranging from $1B to $10B. It is also known that BlockFi only has $256.9M. The company got some of it by selling its own cryptocurrency before bankruptcy, court documents show.
The company plans to reorganize rather than sell assets to interested investors, but what happened has already affected the cryptocurrency market. About this further.
It is worth mentioning that cryptocurrencies were not as badly affected by BlockFi’s statement as by the FTX collapse. However, on November 29 in morning trading in Asia, experts recorded a drop in the two most popular digital assets — Bitcoin (down 1.4% to $16,213) and Ethereum (down 2.2% to $1,169).
Both cryptocurrencies rose after that, but at the time of writing, they have fallen back to $16,471 (minus 0.13%) and $1,212 (minus 0.25%) respectively in the last hour.
Meme coins also took a beating. For example, DOGE, after a week-long rise of a whopping 35% is down just over 1% and is trading at $0.1028 per coin at the time of writing. Shiba Inu is down 1.2% and is now trading at $0.0000009095.
The native token of the largest cryptocurrency exchange, Binance, also showed significant negative growth. According to Forkast, BNB fell 5.25% to $292.91. However, it was saved by the fact that the platform had previously proved reserves, in order to be more transparent after the collapse of all the same FTX.
Polygon, which has not even begun to recover from the general problems in the market, is showing a steady decline. During the last week, the coin fell by 1.36% and in the last hour by 0.4%, with one MATIC you can buy for $0.8376.
The same can be said about Solana, which has already dropped out of the top 10, dropping 20% after the FTX crash, and in the last week has fallen another line lower in the ranking. The cryptocurrency is now trading at $13.56 per coin, down 0.37% in the last hour.
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