[Bitcoin Now] Coin Lending Firms Halt Withdrawals, Prices Decline... Investor Sentiment 'Cools'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Following the liquidity crisis of the global exchange FTX, the suspension of customer withdrawals by a cryptocurrency lending service provider has led to a weak price for the leading cryptocurrency Bitcoin.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:35 a.m. on the 17th, the price of Bitcoin was recorded at $16,696 (approximately 22.26 million KRW), down 0.68% from the previous day.

Genesis Trading, a cryptocurrency lending service provider, announced on Twitter the previous day that "in consultation with professional financial advisors, new loans and redemptions will be temporarily suspended." Genesis Trading had previously revealed that $175 million was tied up in FTX accounts. This decision was made due to abnormal withdrawal requests following the FTX incident, which exceeded liquidity. Genesis has been operating a business lending cryptocurrencies to customers with about a 10% fee and also served as a cryptocurrency exchange.

The crisis has also affected another exchange, Gemini. Gemini decided to suspend repayments to Gemini Earn users who deposit coins to receive interest. Since Gemini Earn has been operating services together with Genesis Trading, this measure appears to have been taken following Genesis Trading’s suspension of new loans.

Cryptocurrency specialized media CoinDesk evaluated that "the ripple effects of FTX's collapse are rapidly expanding." Earlier, cryptocurrency lending firm BlockFi also reportedly suspended customer withdrawals due to liquidity issues and is preparing for bankruptcy.

Additionally, the U.S. stock market, showing a synchronized decline, closed lower. On the 16th (local time), the outlook that retailer Target’s Q4 earnings might decrease ahead of the shopping season affected the stock market. The tech-heavy Nasdaq index closed at 11,183.66, down 174.75 points (1.54%). The Dow Jones Industrial Average fell 39.09 points (0.12%) to 33,553.83, and the large-cap S&P 500 index ended the day at 3,958.79, down 32.94 points (0.83%).

As negative factors piled up in the coin market, investor sentiment cooled. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, dropped 3 points from the previous day to 20 points (extreme fear). This is the lowest level recorded this month. Alternative’s Fear & Greed Index ranges from 0 points, indicating extreme fear and pessimism about investment, to 100 points, indicating optimism.

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