Mike McGlone, commodity strategist at Bloomberg Intelligence, believes the crypto market slump can trigger a capitulation in other markets. He said the Bitcoin, crypto slump may trigger macroeconomic dominoes.
The strategist says the breakdown of Bitcoin and other crypto assets may trigger capitulation sell stops in most markets that have been under pressure this year. The crypto sector is trying to come to terms with the FTX fallout, the latest shock for the digital assets industry which is trying to overcome the ongoing slump. McGlone said the macroeconomic effect might be significant.
But he continues to regard Bitcoin as one of the fastest horses in the race. However, the much-loved cryptocurrency risks having its price dropping to as low as $10,000. At the time of writing this article, BTC was trading at $16,727 having lost 8.38% in the last 24 hours. And lately, the popular cryptocurrency traded in tandem with equities.
Crypto exchange FTX’s collapse came about when Changpeng Zhao tweeted on Sunday that Binance would sell its FTT holdings (FTX’s native digital token). He attributed the decision to reports that around $5.8 billion out of $14.6 billion of assets on Alameda Research’s balance sheet was linked to FTX’s FTT token. FTX and Alameda Research are very close and were founded by Sam Bankman-Fried himself. This revelation brought in hard-hitting questions about the real-world, and open-market value of FTT tokens held in reserve by affiliated entities.
The FTX ordeal has shaken the global crypto industry to its roots.