The impact of Blockfi’s Bankruptcy on The Top 10 Cryptocurrencies
BlockFi, a US-based cryptocurrency lender, has applied for Chapter 11 bankruptcy protection as a result of a liquidity crisis brought on by its proximity to FTX. BlockFi did business with FTX by lending money to the cryptocurrency trading company Alameda and by holding cryptocurrencies on FTX’s platform. According to BlockFi, the company’s assets and liabilities ranging from USD 1 billion to USD 10 billion.
Following the failure of FTX, the management team and board of directors immediately took action to protect clients and the business, according to BlockFi representatives quoted by fintechnews.ch. Additionally, the company acknowledged having a sizable exposure to FTX and related corporate entities but denied that the majority of its assets were invested in FTX.
Blockfi officially filed for bankruptcy yesterday, almost 3 weeks after halting user withdrawals on November 11th.
Their on-chain movements show most of their assets being sent to central wallets, with a high probability of many assets still being stuck on CEX’s.
Lets dive in: pic.twitter.com/Xqatw2IMdS
— Arkham | Crypto Intelligence (@ArkhamIntel) November 30, 2022
BlockFi received USD 850 million in two funding rounds in 2021, in addition to a USD 400 million line of credit from FTX US in the summer of 2022. Customer withdrawals are still on hold as the company decides how to proceed. Additionally, customers were urged not to make any deposits into their accounts.
The top ten cryptocurrency losses following BlockFi’s bankruptcy
- Ethereum (ETH)-As another victim of the FTX exchange’s demise this month, U.S.-based cryptocurrency lender BlockFi declared bankruptcy overnight, according to CoinMarketCap. Ether dropped 2.2% during Asian trading to trade at US$1,169.
- Binance USD (BUSD)-This is corroborated by the fact that BlockFi’s bankruptcy caused Binance Global Inc., the biggest cryptocurrency exchange in the world, to experience a 5.2% decline in value to US$292.91 on CoinMarketCap.
- Litecoin (LTC)-The impact of BlockFi’s bankruptcy was also felt by Litecoin, which has been losing ground recently and is the biggest dropper among the top 10 cryptocurrencies, falling by 4.34% to US$74.92. Crypto experts are constantly analyzing the fluctuations of Litecoin. They predict that the average LTC price will be around $391.25. By the end of 2027, it might decrease to a minimum of $378.04 but still increase to $448.73.
- Bitcoin (BTC)- Bitcoin maintained crucial $16,000 support even during the FTX fallout and macro triggers in recent times. Bitcoin’s performance was unaffected even by fresh repercussions from the FTX debacle. A bankruptcy filing and a lawsuit from cryptocurrency lender BlockFi brought about Bitcoin’s demise, but they were not the cause.
- USD Coin (USDC)- As a result of BlockFi, USD Coin is currently down 0.02%. With a live market cap of USD 43,277,343,538 and a current CoinMarketCap ranking of 5,
- Uniswap (UNI)-UNI’s price dropped by 30% to about $25.60 over the course of the next few days before starting to rise steadily once more. However, BlockFi has an impact on this price change.
- Ripple (XRP)-Although Ripple (XRP) was down 14.89%, its 24-hour trading volume of $4,168,457,428 was up 168.14%.
- Dai (DAI) – It has recently decreased by 0.05%. As one of the businesses supporting Dai, it is asserted that BlockFi’s bankruptcy is the cause of the problem.
- Solana (SOL)- Since BlockFi filed for bankruptcy, the price of Solana (SOL) fell from $22.76 to $22.76 in the most recent trading session.
- Basic Attention Token (BAT)- Recently, it has been on the decline, dropping -26.49% over the previous 30 days. The price of Basic Attention Token has fallen by -34.13% over the past three months, indicating a bearish medium-term trend. This was anticipated in light of BlockFi’s bankruptcy.
BlockFi was compelled to act in a manner that it had previously resisted during the Voyager and Celsius meltdowns. BlockFi stopped accepting withdrawals from customers on November 11, the day FTX declared bankruptcy. Investors at companies like FTX, Voyager, and Celsius are currently in limbo without access to their money.