Bitcoin’s price continues to face turbulence, reaching a low of $80,760 on Friday before briefly recovering to above $85,000, only to decline again. As reported by CoinMarketCap, the current price stands at approximately $82,800. Over the past couple of months, Bitcoin has endured a steep decline, falling by 14% within the last week, 23.5% over the month, and a substantial 34% since its all-time high of over $126,000 on October 6. Analysts note that Bitcoin is heading for its worst monthly performance since the cryptocurrency market crash of 2022.
The fallback of Bitcoin brings to mind the tumultuous events of 2022, when Sam Bankman-Fried’s crypto empire, FTX, collapsed. Bankman-Fried was discovered to be utilizing customer deposits from his exchange to cover losses at his trading firm, Alameda Research. Central to the downfall was the revelation that Bankman-Fried had been trading with a token called FTT, which was not supported by real assets.
Binance CEO Changpeng Zhao initially acquired a 20% stake in FTX in 2019, but following a fallout in 2021, Bankman-Fried bought back his shares using $2 billion worth of FTT. When Zhao decided to cash out his FTT in 2022, it triggered a chain reaction that led to the unraveling of FTX and exposed a significant fraud case against Bankman-Fried. Despite engaging in numerous illegal activities, Bankman-Fried might have sustained his operations longer had Zhao not orchestrated the cash-out, which effectively destabilized the competitor’s foundation.
Currently, Bankman-Fried is serving time in prison for his actions, while Zhao faced five months of imprisonment for unrelated anti-money laundering offenses but was recently pardoned by former President Donald Trump.
The consequences of these events are now evident in the cryptocurrency market landscape. Some crypto miners are shifting focus toward more lucrative AI projects, and crypto analytics firm DappRadar announced its permanent shutdown, raising concerns about a potential full-scale collapse of the sector. This backdrop casts a shadow over previous optimistic projections, such as Bitcoin reaching $200,000 by the end of the year.
Other cryptocurrencies are reflecting similar downward trends. Ethereum has dipped 31% in the past month and 19% over the year. XRP (Ripple) has experienced a 22% decline in the last month but maintains a 22% rise year-to-date due in part to the SEC litigation that previously suppressed its price. In a surprising turn of events, the Trump administration, known for its favorable stance toward cryptocurrencies—given the president’s significant holdings—reduced pressure on Ripple in August, which contributed to this fluctuation.
BNB, Binance’s native coin, has also seen its value decrease recently, with a 24% decline over the month despite a 22% increase for the year, influenced by the dropping of a lawsuit against Binance by the SEC earlier this year. In a troubling sign for the market, Solana’s price has plummeted 35% over the month and 51% year-to-date. The recent 24-hour period alone witnessed the liquidation of $2 billion in leveraged crypto positions.
With uncertainties looming over the crypto market, many are left wondering if the current moment marks a bottom for Bitcoin and other cryptocurrencies. The prevailing sentiment reflects a significant lack of clarity, leaving investors hesitant and on edge, as no one can predict the market’s trajectory with certainty.
