Crypto Winter: More Dominos Join The Tumble
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Crypto Winter: More Dominos Join The Tumble

Story Highlights

The crypto winter is beginning to set in, but one major name in the space seems to be making the most of this carnage.

The mayhem in the crypto-verse is now being called a crypto winter and prices continue to fall further.

Bitcoin (BTC-USD) has slid a further 6.9% over the past week and is now trading decisively below the $20,000 level. Ethereum (ETH-USD), too, has dropped 7.3% over the past week and is hovering close to $1,000 levels. So far this year, the two most prominent cryptocurrencies have now dropped 59% and 72%, respectively.

FTX Continues Major Moves

Crypto exchange FTX is taking major strides even as the broader price slump continues to affect other players in the industry. Earlier this week, a possible takeover of Robinhood Markets (HOOD) by FTX gave a fillip to HOOD shares which are down 55% so far this year.

Last month, Sam Bankman Fried’s FTX had thrown a lifeline for crypto lender BlockFi in the form of a $250 million credit line. Now, FTX is close to acquiring BlockFi, according to CNBC. FTX is set to acquire the crypto lender for about $25 million which is a far cry from its earlier nearly $5 billion valuation!

At the same time, Bankman-Fried is more than aware of the ground realities. According to Forbes, the 30-year-old billionaire commented, “We are willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilize things and protect customers… There are some third-tier exchanges that are already secretly insolvent.”

Bankman-Fried is not biting into all the deals that come his way and is not pursuing the acquisition of Celsius, another troubled crypto lender. Last month Celsius had paused withdrawals, swaps, and transfers, which resulted in the CELSIUS token taking a massive tumble.

While FTX has parted ways after seeing a $2 billion hole in the crypto lender’s balance sheet, Celsius continues to explore options. According to The Block, Celsius has sought the help of Citigroup (C) (GB:0R01) and Consultants Alvarez & Marsal to alleviate its troubles.

Closing Note

The utopian promise of cryptocurrencies is fast coming undone. As liquidity further dries up, more dominos can be expected to join the fall. Whether the crypto winter becomes tulip mania 2.0 remains to be seen.

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