The dramatic takeover of FTX, formerly the world’s second-largest digital asset exchange, by its dominant rival Binance, has caused heavy losses across the entire cryptocurrency market, just as things were starting to appear stable.
Apparently stability can only last so long, and the consolidation carved a US$100bn wound, causing global market capitalisation to drop below US$900bn.
At the top end of the market Ethereum was the worst hit, having dipped around 15% this Wednesday.
Currently changing hands at US$1,277, ether could test the US$1,260 support line should the market continue to move in a downward direction.
Bitcoin is hardly responding well to the volatility, having fallen as low as US$16,900 before the bulls stepped in, bringing the coin back to US$18,200.
Bitcoin cedes recent gains following major shake-up of crypto exchange sector – Source: currency.com
It’s an unfortunate circumstance for bitcoin, having been bolstered by strong price action in recent weeks.
But with clear evidence of support at the US$18,100 price point, there is some hope for stability once the news cycle moves on.
It comes as no surprise that FTX Token (FTT) suffered major harm. At the time of writing, the exchange token has lost 80% of its value, bringing its market cap down to US$615mln.
Among the network tokens, Solana (SOL) sustained heavy 35% losses, while Algorand (ALGO), Polygon (MATIC) lost upwards of 20%.
Cardano (ADA) and Polkadot (DOT) have so far managed to contain losses in the single digits.
One network to actually add value this morning was Tron (TRX), which rose 2.4% to bring its market cap up to US$5.7bn.
As for the meme coins, Dogecoin (DOGE) dipped 25% and Shiba Inu (SHIB) 8%.
Things are not looking too bright in the decentralised finance (DeFi) space either.
Lido DAO (LDO) was the worst hit, with over 20% carved out of its market cap, while Curve (CRV) and Synthetix (SNX) fared little better.
At US$48.86bn, total value locked across the whole DeFi space is now 10% less compared to this time last week.
Read more on Proactive Investors AU
