JP Morgan warned that Bitcoin could lose 80% of its value due to a “cascade” of margin calls in the aftermath of the crisis at FTX crypto exchange.
Wall Street Bank analysts said that the world’s largest cryptocurrency could plummet to $13,000, an 80% drop from its peak value of $68,000.
It occurs as a liquidity crisis at FTX, founded by Sam Bankman Fried, sends shockwaves through the volatile sector.
Rival exchange Binance walked away last night from an emergency bailout leaving FTX on edge.
Bitcoin has fallen by nearly 60% this year. It is now below $15,000, down from $19,000 last Friday.
After talks with its main competitor about an emergency bailout, one of the largest cryptocurrency exchanges in the world is at risk of collapse.
Binance stated in a statement that he hoped to be able to support FTX customers to provide liquidity. However, the Wall Street Journal reports that the issue is beyond our control and ability to help.
FTX, a trading platform that was backed by Bluechip Investors like BlackRock and the Ontario Teachers Pension Plan had to turn to Binance to get a bailout after customers attempted to withdraw $6bn within 72 hours. This is the crypto equivalent of a bank run.
Binance’s withdrawal from talks has cast doubt on the future of FTX. It was revealed that the relationship between the company and founder Sam Bankman Fried’s other businesses was also under investigation by US regulators.
