The digital currency ecosystem is trading with massive volatility that was engineered by the collapse and eventual bankruptcy of the FTX derivatives exchange over the past week. The combined crypto market cap has slumped to $837.47 billion, one of its lowest points over the past year.
FTX Token (FTT) visibly induced the breakdown in prices dropping by over 92.33% in the trailing 7 days period to $1.78 according to data from CoinMarketCap. The coin’s collapse mimicked that of Terra (LUNA) which shed 12 months' gains in just about a week when the TerraUSD (UST) algorithmic stablecoin collapsed earlier in May.
Investors in the industry have lost trust in FTX even before its bankruptcy filing, a move that stirred the withdrawals of funds that precipitated the trading platform’s liquidity crunch. Seeing the bleak future of the company, FTT holders had to sell off the coins on other exchanges also.
How the Top 10 Coins Performed for the Week
Every digital currency in the top 10 list has performed relatively poorly over the past week to date. Bitcoin is changing hands at $16,655.55, down 21.50% in the week-to-date period. Bitcoin even dropped as low as $15,682.69 in the course of the week, its lowest point in close to 2 years.
Ethereum (ETH) met a similar fate and slumped 23.63% over the week to $1,237.73. Binance Coin (BNB) is trading at $278.36 atop a 20.41% slump. XRP, Polygon (MATIC), Dogecoin (DOGE), and Cardano (ADA) also recorded more than a 20% drop over the week under review.
Despite the onslaught that has been recorded thus far, the ecosystem is still not out of the woods as the ripple effect of the FTX collapse is bound to be revealed in the coming weeks. Investors will need to err on the side of caution until the coast is adjudged to be clear.
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