Bitcoin drops to 1-week low, ether slides 7% as FTX collapse ripples through crypto market

Bitcoin hovered around a one-week low on Monday and other major cryptocurrencies fell sharply, as the impact from the dramatic collapse of FTX continues to ripple through the market.

Bitcoin was last lower by 2.4% to trade around $16,106.78, according to Coin Metrics. Ether fell 3.7% to $1,130.83.

The cryptocurrency market has come under pressure over the last two weeks as problems at major exchange FTX came to light.

From Nov. 6 — the day Binance CEO Changpeng Zhao said his exchange would liquidate its FTT tokens — the crypto market has lost more than $260 billion of value.

FTT is the native token of FTX’s crypto exchange and Zhao’s decision to sell FTT sparked the collapse of FTX, which has since filed for bankruptcy. Binance was a rival to FTX.

FTX’s new CEO John Ray said on Saturday that the exchange is looking to sell or restructure its global empire.

The company owes its largest creditors some $3 billion.

Crypto markets remain on edge because it is unclear how the FTX saga will end, and whether there will be further contagion across the industry.

“The market is in wait and watch mode to see whether there are any other entities that could fall as a result of being exposed to FTX,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC.

Investors have been burned by a number of high-profile crypto failures this year which have caused significant ripple effects.

Earlier this year, the collapse of terraUSD, a type of cryptocurrency known as an algorithmic stablecoin, had knock-on effects on a number of companies and contributed to the fall of major hedge fund Three Arrows Capital.

Amid the turmoil of the FTX collapse, around $477 million in crypto assets were drained from the exchange’s accounts in a suspected hack, according to blockchain analytics firm Elliptic. FTX admitted that “unauthorized transactions” had occurred, but did not give details on how much money was moved.

Blockchain analytics firm Chainalysis said on Sunday that the stolen funds “are on the move.”

The hacker has begun dumping some of their ether holding into other assets, according to public blockchain records of the account suspected to be linked to the person. This could be one reason that ether is down more sharply than bitcoin.

“It obviously adds a direct selling pressure on ethereum and it affected bitcoin and other tokens,” said Yuya Hasegawa, crypto market analyst at Japanese crypto exchange Bitbank.