Crypto Prices Bounce as FTX Searches For Rescuers, Tether Peg Slips, Contagion Fears Mount
Crypto prices bounced today but how long can the reprieve last and will FTX survive?
Well, the game isn’t up for FTX just yet, as various reports suggest the crypto exchange teetering on the edge of bankruptcy is in talks with investors as it seeks a rescue deal.
Now market participants worry that contagion could spread like wildfire.
However, there was some reprieve for crypto prices today when US CPI inflation figures came in soft, leading to an explosion in stock indices, with the Nasdaq composite jumping 4.5%.
Bitcoin reversed its losses for the day and is up nearly 1% at $17.756.
Inflation decelerated to a 7.7% annual increase in October from 8.2% last month, with both the headline and core readings below the median of economists' forecasts.
That was taken as a sign that the worst may be behind us, which would be good news for crypto.
The bounce could buy valuable time for FTX founder and CEO Sam Bankman-Fried (SBF), even as US regulatory agencies circle and the exchange's legal team flees the sinking ship
He tweeted about two hours ago, in a long thread, that the company was in talks with a number of players regarding LOIs [letters of intent] and term sheets.
SBF claimed that FTX.US, the exchange for US customers, was “100% liquid” and “not impacted by this shitshow”
The rest of the exchange – which operates under the brand FTX International – is the business that is staring insolvency in the face.
Today FTX.com put a notice on its website which reads: “FTX is currently unable to process withdrawals. We strongly advise against depositing.”
Justin Sun, the founder and CEO of crypto project Tron, is thought to be in talks with FTX. He tweeted earlier today that all holders of Tron-based tokens on FTX would be made whole.
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