Bitcoin Facing An Existential Crisis As Exchange Meltdown Continues

Bitcoin could tumble to as low as $13,000 as the industry is rocked by the crisis at the crypto exchange FTX, JP Morgan has warned.

The digital asset bourse was plunged into fresh trouble last night when the world’s biggest exchange and its main rival Binance walked away from a rescue deal.

FTX had struck a non-binding deal to sell itself to Binance amid a major liquidity crunch, but Binance reportedly took fright at the state of the exchange’s books and aborted the takeover.

Analysts at JP Morgan have now predicted that the shockwaves of a collapse of FTX could lead Bitcoin to tumble to 80 percent below its all-time peak of $68,0000 as firms are hit by a “cascade of margin calls”.

The world’s most valuable cryptocurrency has fallen over seven percent in the past twenty-four hours and has shed more than 70 per cent of its value in the past year.

A collapse at FTX is set to shake the industry after a torrid year in the market that has seen over a trillion dollars wiped off its value. FTX, led by Sam Bankman-Fried, had been regarded as one of the more stable companies in the sector and had ridden to the aid of a number of firms this year with emergency loans as they were rocked by a so-called crypto winter.

FTX is now facing an $8bn shortfall, however, and teetering on the edge of collapse without support.

The downturn in the market this year has already wiped out major players including digital lender Celcius and crypto hedge fund Three Arrows Capital.

By CityAM

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