The price of bitcoin fell below $20,000 for the first time in nearly four weeks on Tuesday, with Ether also under pressure as a token linked to crypto exchange FTX tumbled below a crucial level.
Bitcoin BTCUSD, -4.82% was off nearly 5% over the last 24 hours to $19,739, headed for the lowest closing price since Oct. 24, according to CoinDesk data. Ether ETHUSD, -6.07% was down more than 5% in the same period to $1,485, also the lowest since around that date.
Losses for those major cryptos came as the price of FTT , the native token of FTX, slid 19% over 24 hours to around $18.
Sam Bankman-Fried, CEO of FTX, and Changpeng Zhao, CEO of Binance have been at loggerheads after Zhao said Sunday that Binance would sell its remaining FTT tokens, with Bankman-Fried responding that “a competitor is trying to go after us with false rumors.”
Bankman-Fried’s trading house Alameda Research offered to buy all of those FTT tokens for $22 each. Concerns have been raised about the group’s health and potential spillover to the rest of the crypto space after CoinDesk last week reported that Alameda holds a chunk of FTT tokens on its balance sheet.
“The selloff in the FTT token has made the whole industry vulnerable once again and major crypto titans like bitcoin and Ethereum are out of balance as well and moving lower,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients, adding that pressure could send bitcoin to $15,000 or lower.
“No one and I mean no one wants to see a repeat of what we have seen with Celsius and Luna. The crypto industry is already badly bruised by the frauds carried out by companies like Celsius and another blow out of a major project in the industry is highly likely to create a lot of trouble for the industry,” he said.
The collapse of tokens TerraUSD and LUNA earlier this year caused $40 billion in investor losses and rippled through the crypto industry. As part of that fallout, crypto lender Celsius Networks was forced to file for bankruptcy.
“At the beginning, FTX’s CEO Sam Bankman-Friedman said they will defend the price of FTT at $22, but they have apparently failed and the shock ran through the market,” said Yuya Hasegawa, crypto market analyst at bitbank in emailed comments.
“The FTT’s drop is separated from global macro factors and the effect could be short-lived, but if Alameda and FTX’s financial conditions are, in fact, in danger as the rumor says, the effect may be short-lived, but the impact could be much bigger than today’s marketwide sell off,” said the analyst.
The FTT-Alameda saga got even more complicated on Tuesday after pressure spilled over to BIT, the native token of major decentralized autonomous organization BitDAO. According to CoinDesk, Alameda has been asked by the BITDAO community, which includes billionaire Peter Thiel and other funds, for proof it’s still holding 100 million BIT tokens.
Those were reportedly bought in November, after Alameda converted 3.36 million FTT tokens.