Cryptocurrencies could see further fallout.
Bitcoin, for example, is back down to $16.168, and could fall even more. All on news Binance just backed out a deal to acquire FTX, leaving it on the brink of collapse. The news comes just a day after Binance said it reached a non-binding deal to rescue the FTX.
However, according to Binance CEO Changpeng Zhao:
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com. In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help. Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.”
Not only has the news been devastating for FTX and for cryptocurrency investors, it’s been bad news for companies that still hold millions of dollars’ worth of digital currency. Look at MicroStrategy (MSTR), for example. The company held more than 130,000 BTC at the end of September, according to Yahoo Finance. As the value of the coins plummet, so is MSTR, which is now a falling knife that no one is ready to even try to catch.