Bitcoin on Tuesday hit a two-year low as the cryptocurrency market takes a bruising following the collapse of major exchange FTX.
Bitcoin hit $15,480, its lowest level since Nov. 11, 2020, according to CoinDesk data. The digital coin has since bounced from that low and was trading at around $15,728.33 at 4:08 a.m. ET.
The entire cryptocurrency market has lost more than $1.4 trillion in value this year as the industry has been plagued with problems from failed projects to a liquidity crunch, exacerbated by the fall of FTX, once one of the world’s largest exchanges.
Crypto’s latest issues began after Changpeng Zhao, the CEO of Binance, said his exchange would sell its FTT tokens. FTT is the native digital currency of FTX’s crypto exchange. Binance’s move sparked the collapse of FTX, a company once valued at $32 billion. FTX has since filed for bankruptcy.
To make matters worse, hackers stole around $477 million of cryptocurrency from FTX, the bulk of which has been converted into the digital coin ether. But the hackers have begun to launder that money into bitcoin. Because they are selling ether, the price of ether has also been under pressure.
Ether was trading down around 3.5% at $1,089.42 at 4:08 a.m. ET.
FTX may have more than 1 million creditors. It owes more than $3 billion to its top 50 unsecured creditors alone.
Disgraced FTX founder Sam Bankman-Fried stepped down as CEO earlier this month and was replaced by John Ray III.
Ray is looking to sell or restructure FTX’s global empire.
Meanwhile, Bankman-Fried is still holding out hope that he can broker some sort of deal to bail out FTX.
But crypto prices remain under pressure as investors fear the FTX collapse could cause contagion across the industry.
Earlier this year, the collapse of a so-called algorithmic stablecoin terraUSD sent shockwaves across the crypto world and contributed to the fall of other entities such as hedge fund Three Arrows Capital.
Investors are concerned about similar ripple effects from FTX’s failure.