Bitcoin hit a two-year-low on Tuesday, as the cryptocurrency market struggles to recover from the collapse of one of its biggest exchanges, FTX.
The price of a single Bitcoin hit $15,480 this week, its lowest point since November 11, 2020, but did recover the same day to pass that figure.
The cryptocurrency market has lost $1.2 trillion in value so far this year, after 12 months spent lurching from one disaster to another. Failed projects and a liquidity crunch made a dent, but the biggest problems stemmed from the demise of FTX.
Earlier this year, the CEO of Binance, the largest crypto exchange in the world, announced his company would sell all its FTT tokens, the native currency of the FTX exchange. This prompted a mass sell-off, and when the brief hope of a merger with Binance was extinguished, FTX filed for bankruptcy.
FTX is believed to have more than 1 million creditors, and reportedly owes more than $3 billion to its top 50 unsecured creditors alone. FTX was previously valued at $32 billion, but its value crashed to nothing in the space of just one week.
The ripple effects from that spectacular failure are still being felt across the cryptocurrency industry. On Tuesday, Ethereum was also trading down 2.78% from a day earlier, and 74% down compared to a year ago. Binance’s BNB crypto is down 55% from a year ago. Another crypto company, Gemini, has warned it could file for bankruptcy in the future. The firm had $175 million in an FTX account, and is not likely to ever get that money back.