Crypto Market is Crashing 🔴

The Crypto market has turned red due to the ongoing drama between FTX and BNB. People all across the space are panicking. Let us learn about the whole drama in under 2 minutes, Here we go geeks 🚀

THE EARLY DAYS

Both Binance and FTX are cryptocurrency exchanges where users can purchase, trade, and manage cryptocurrencies. Each site also has its own cryptocurrency token, which is, respectively, BNB and FTT.

Binance, founded in 2017 by Changpeng Zhao (CZ), was an early investor in FTX, founded in 2019 by Sam Bankman-Fried (SBF) 🔥

THE PLOT TWIST

FTX quickly grew to become the #2 biggest crypto exchange, after Binance (FTX reaching +15% of the trading volume of Binance).

Friends became competitors and CZ (Binance) decides to sell its stake in FTX, mid 2021. Binance agreed to take $2B of FTX' token FTT as part of the buy-out deal. At this point Binance is the #1 exchange with a rather aggressive growth strategy, while owning 2 BILLION dollars of its main competitors native token

FAST FORWARD TO THIS WEEK

Binance reported that FTX founder SBF has been lobbying in a way that would hurt Binance, so they threaten to sell their 2 billion dollar worth of FTT (total market cap of 3 billion at that time). FTT holders start to panic sell and the price drops 20% putting FTX in a bad spot

SBF owns hedge fund Alameda Research which has $12 billion in assets; providing liquidity to FTX unfortunately 50% of their assets are in FTT, which at the time is crashing.

Yesterday, SBF and CZ confirm that FTX and Binance enter a strategic partnership - due diligence to acquire FTX is ongoing.

Binance reportedly will acquire FTX to "save them" and avoid users to lose funds, saving the crypto market from a complete meltdown

That's it for the day geeks, Web3Shala Signing Off ✌🏻

Have a nice day :)Keep Learning 🙏🏻