'Bankruptcy Filing' FTX Crisis Sparks 'Extreme Fear' in Crypto Market Sentiment

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The global cryptocurrency exchange FTX, which faced a bank run (a situation where customers withdraw coins all at once) due to a liquidity crisis, filed for bankruptcy protection, causing investor sentiment to plunge into extreme fear.

According to cryptocurrency data provider Alternative on the 13th, the Fear & Greed Index, which measures investor sentiment, rose by 1 point from the previous day to 22 points (extreme fear). Alternative's Fear & Greed Index ranges from 0 points, indicating extreme fear and pessimism about investment, to 100 points, indicating optimism.

On the 6th, the index had risen to 40 points (fear), showing signs of improvement. However, after the FTX incident, investor sentiment sharply cooled and is now showing extreme fear. The 21 points recorded the previous day (extreme fear) was the lowest level so far this month.

On the 11th (local time), FTX announced via Twitter, "We have voluntarily initiated bankruptcy protection procedures to liquidate assets and begin an orderly review process for the benefit of all stakeholders worldwide." FTX reported to the court that its debt exceeds 66 trillion won. The debt ranges from $10 billion to $50 billion (13.2 trillion to 66.2 trillion won), with assets of a similar scale. Additionally, $662 million worth of digital tokens were withdrawn from FTX's coin trading platforms, FTX International and FTX US, within the past 24 hours, raising concerns about possible hacking.

On the same day, the price of the leading cryptocurrency Bitcoin was trading in the $16,700 range due to the impact of the FTX incident. The price continues to decline compared to the previous day. On the 10th, Binance, the world's largest exchange that had expressed interest in acquiring FTX, withdrew its offer, causing Bitcoin to plummet to the $15,000 range.

This content was produced with the assistance of AI translation services.