Bitcoin Tumbles as Worry Grows Over FTX’s Troubles
Bitcoin and other cryptocurrencies tumbled on Tuesday as worries about the fallout from FTX’s troubles grew. The price of bitcoin fell as low as $20,000, and was last trading at $21,500, down 8%. Ethereum fell 10% to $2,200, while XRP slid 9% to $0.47.
The sell-off came as investors continued to digest the news that FTX, a major cryptocurrency exchange, is facing regulatory problems in the U.S. The exchange is being investigated by the Commodity Futures Trading Commission over concerns about its trading practices.
The investigation is still in its early stages, and it’s not clear what, if any, action the CFTC will take. But the news has cast a shadow over the cryptocurrency market, which has been on a tear this year. Bitcoin is up more than 400% since January, while Ethereum has gained more than 900%.
FTX is a relatively new exchange that has become popular with traders for its aggressive marketing and wide range of products. The exchange offers leverage trading of up to 100x on some cryptocurrencies, and also allows users to bet on the direction of various assets, including stocks, commodities, and currencies.
The CFTC’s investigation is focused on whether FTX misled customers about the risks of leverage trading, and whether the exchange engaged in “spoofing” or “wash trading.” Spoofing involves placing orders with the intention of cancel them before they are executed, in order to manipulate prices. Wash trades are trades between two parties that have no real economic value.
The CFTC’s investigation into FTX is still in its early stages, but the news has already had a negative impact on the cryptocurrency market. Bitcoin and other cryptos tumbled lower on Tuesday as worries about the fallout from FTX’s troubles grew. The price of bitcoin fell as low as $30,000 before rebounding slightly. Ethereum and XRP also slid lower on the day.