After the major announcement of Binance acquiring competitor FTX, cryptocurrency prices fell as investors ponder whether to hold or sell.
It comes as users of the FTX crypto exchange were left in limbo over the future of their shares of cryptocurrencies such as Bitcoin, Ethereum and Solana.
But the crypto token that has taken the brunt of the aftermath of FTX’s decision to sell to Binance is the FTX native token FTT, which fell dramatically by 85% in the last 24 hours.
Before acquiring FTX, Binance revealed they were liquidating their shares of FTT following reports of financial instabilities with FTX’s sister company, Alameda Research, which relied heavily upon the tokens performance.
However, the detrimental impact of FTT’s crash has affected FTX associate SOL, which was trading at its highest yesterday at $31 to $16.54 (46% drop) today, primarily due to Alameda Research being an early investor in the Solana blockchain.
Prices of some of the largest cryptocurrencies have also been affected, as Bitcoin experienced a 14% fall in price to $17,643, the lowest since last June in the aftermath of the Terra Luna collapse.
Ethereum and BNB (a Binance native token) took huge hits in the wake of FTX’s solvency issues. Ethereum suffered a 25% drop in the last 24 hours, but BNB remains the most intriguing price development over the last several hours.
The Binance token shot up in price by 9% in just over an hour after the announcement of the crypto exchange platform’s decision to buy FTX. However, BNB ultimately dropped significantly in the following hours, dropping from its one-day height price to as low as $1,164 as of today, a 25% decrease.
FTX’s near collapse would have brought about a market collapse even more detrimental to that it experienced last Summer during Terra Luna’s fall.
Binance CEO, Changpeng Zhao, has recently provided clarity regarding the ongoing FTX deal via his Twitter.
Zhao expressed to investors, “Do not trade FTT tokens” amidst a troublesome time for crypto investors, which Zhao acknowledges that “user confidence is severely shaken”.