CZ vs SBF: From War to Acquisition

FTX liquidity, the state of the market, and CZ buying FTX

GM Baos,

I hope you didn't FOMO into SOL after the Google Cloud announcement… or anything else. A lot has happened in the past 48 hours.

We cover:

  • Is FTX insolvent?

  • The state of the market 📉

  • CZ Binance buys FTX

How it all started 

It hasn't even been six months since the LUNA/UST crash 😭 Can we please wait at least five years before having the next black swan event? 

This time around it is FTX who crashed the markets. Everyone is shocked because they are the third largest cryptocurrency exchange in the world. Sam Bankman-Fried (SBF) was doing good things with FTX and his Alameda Research fund—or so we thought. 

The timeline of events…

November 2nd- Coindesk reported Alameda Research had a large amount of FTT on their balance sheet. The token of FTX’s exchange. 

Why could this be a problem? This means a majority of Alameda’s equity is with a vaporous token that’s value is tied to FTX. If something were happen with FTT, Alameda couldn’t cover their debts. 

November 6th- After seeing the Coindesk article, Changpeng Zhao (Binance CEO) tweets they will sell all their FTT holdings. Saying they will do it gradually to minimize market impact.

FTT’s price starts to rapidly decrease.

SOL’s price starts to rapidly decrease. 

November 7th- Everyone rushes to withdraw funds from FTX (before they lock withdrawals). And within 72 hours FTX had processed $6b in withdrawals. 

As everyone was panicking, FTT and SOL kept plummeting more. Leaving Alameda with major gaps on their balance sheet. Since FTT and SOL were two of their largest holdings. 

The market falls apart 🤯

If FTT being down -80% in 24 hours and FTX locked withdrawals wasn’t enough. 

Coinbase users panic as Coinbase temporarily goes down. 

BitBoy claims he ended Sam’s career… 

DoKwon goes on the UpOnly podcast. 

Zhu Su resurfaces for the first time in months. To tweet about… himself 😳  

Binance to aquire FTX & end the chaos 

Sam ain't a billionaire anymore. Bloomberg estimated his net worth fell from $15.6b yesterday to $991m today. 

While prices are still down bad, this is where the drama ends— I hope. SBF and CZ sign a non-binding letter of intent for CZ to acquire FTX. 

We will have to see what happens next and if the acquisition deal goes through 🙏  

Bao-Sized News

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