Cryptocurrencies extended declines as Binance Holdings Ltd’s (幣安) potential takeover of embattled rival exchange FTX.com highlighted how strains in the digital asset industry are buffeting some of its top players.
Bitcoin, the largest token by market value, fell as much as 3.8 percent yesterday, after a decline of nearly 10 percent a day earlier, and was trading at about US$18,120 as of noon yesterday.
Just about every digital coin was struggling: Ether, polkadot, avalanche, solana and meme token dogecoin slumped.
Photo: Bloomberg
Binance chief executive officer Zhao Changpeng (趙長鵬), who is also known as CZ, on Tuesday stunned the cryptocurrency world with an announcement that his firm was moving to take over rival FTX, which he said was seeing a liquidity crunch.
Traders cited a Twitter post by Zhao that a letter of intent between the two parties is nonbinding as contributing to the market turmoil.
Investors are on edge about spreading contagion given the pivotal role FTX and its cofounder, Sam Bankman-Fried, played in the industry.
FTT, the utility token of the FTX exchange, collapsed more than 70 percent within 24 hours and was trading at about US$5, CoinGecko data showed.
The price of sol, the native token of solana blockchain — which is associated with FTX and linked cryptocurrency trading house Alameda Research — posted dramatic drops alongside other tokens of solana-based projects.
“The letter of intent is nonbinding, which means that further issues could still arise if CZ/Binance decide to back out of the deal,” CryptoCompare research associate David Moreno Darocas said.
The letter of acquisition intent by Binance came after a bitter feud with Bankman-Fried spilled into the open.
Zhao allegedly undermined confidence in FTX’s finances, helping spark an exodus of users from the three-year-old FTX.com exchange.
A day before reaching a deal, Bankman-Fried wrote on Twitter that assets on FTX were “fine.”
Terms of the emergency buyout were scant, with Binance saying the agreement came after “a significant liquidity crunch” befell FTX and the firm asked for its help.
Bankman-Fried and “FTX were the biggest patrons of solana,” Teng Yan, a researcher at digital-asset research firm Delphi Digital, wrote on Twitter. “This era is over. Binance has taken over, and they will heavily favor BNB chain over Solana. Alameda had ~$1B in locked and unlocked $SOL, which they’ll have to sell if insolvent. This puts a huge sell pressure on $SOL.”
The FTX-Binance ordeal gave some traders flashbacks to the issues at Celsius, a cryptocurrency lender that collapsed earlier this year, as well as those seen by other companies that were engulfed in this year’s crash in digital assets.
Teong Hng, CEO at cryptocurrency investment firm Satori Research, said the “situation is still very fluid.”
“I am confident these two cryptogiants will do the right thing to protect investors and the industry,” he said.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS