Crypto prices sink amid further FTX woes after surging on US CPI

Cryptocurrency prices retreated on November 11, Friday as the knock-on effects from FTX’s downfall persisted, even as other risk assets surged after US inflation data.

Bitcoin dropped as much as 5.5 per cent to as low as $16,837. It had jumped 13 per cent on Thursday as the CPI reading came in lower than expected, fueling expectations that the Federal Reserve would slow the pace of rate increases. A gauge of Asia-Pacific shares rose as much as 3.6 per cent.

“Contagion risks in cryptocurrencies, following on from the FTX-Alameda collapse, will take a long time to work through and the market remains vulnerable,” said John Toro, head of trading at digital-asset exchange Independent Reserve in Sydney.

Ether fell as much as 7.9 per cent. After more than doubling Thursday, FTX’s FTT token declined up to 40 per cent on Friday.

FTX founder Sam Bankman-Fried reportedly faces an investigation by the US Securities and Exchange Commission, and crypto lender BlockFi has halted withdrawals due to the turmoil. That’s on top of the Bahamas freezing FTX.com’s assets, and the general counsel of FTX.US telling staff he’s working with advisers to preserve what they can of the exchange.

The uncertainty is likely to roil crypto markets for a while.

“We’re going to see definite lower volumes because people are going to hold back at this moment in time,” Coinbase chief financial officer Alesia Haas said on Bloomberg Television.