FTX and Binance beef bothers crypto market, bitcoin plunges below $20,000

Quick Take

  • Bitcoin was trading at $19,705 on Tuesday, while ether was down to $1,482.
  • BNB shed 1.5% since Monday, while FTT was down 23.95%.
  • Inflation data out of the U.S. might just take a back seat to crypto this week, according to some market makers. 

Crypto markets continued to sell off on Tuesday as two of the industry's biggest exchanges — FTX and Binance — have engaged in something of a public dispute. The global crypto market cap has come crashing back toward $1 trillion after bitcoin fell 5% to $19,705 and ether plunged 6.4% to $1,482 at 7:30 a.m. ET, according to CoinGecko data.

Since Sunday — when Binance's CEO Changpeng "CZ" Zhao (CZ) said that the exchange would begin selling its FTT holdings — Binance has been at odds with Sam Bankman-Fried's FTX. The exchange's respective tokens have had varying reactions to the events. BNB is down 1.5% over the past 24 hours, trading at $327.39, while FTX's FTT token is down over 24% in the same period, trading below $18. The majority of FTT's losses came after 10:00 p.m. ET on Monday. 

Meanwhile, the global crypto market cap lost about 4% over the past day as the market tumult continued — falling to $1.02 trillion. 

Macro matters

Beyond the world of crypto, where billionaires' bickering is taking center stage, traditional markets are trained on U.S. inflation data. The October Consumer Price Index (CPI) data will be released on Thursday. The pace of future Fed rate hikes might well hinge on these figures.

Jerome Powell continued his hawkish stance last week when the central bank raised rates by 75 basis points. A hot number on Thursday could mean another hefty interest rate hike in December. Interest rate traders are currently pricing in a 48% chance of a 75 basis point increase on Dec. 14, according to the CME's FedWatch tool. 

Alas, despite the significance of inflation data in the broader economy, the spat between FTX and Binance might be the most important factor in crypto this week, according to B2C2. The market maker joined other firms in raising questions over the clash between CZ and SBF:

"Despite the wider markets obvious focus on CPI as the week’s most important data point, given the public spat between the founders of the world’s two biggest crypto exchanges, it might just turn out that the most important numbers for crypto this week are the prices of two mid cap coins: FTT and SOL. Weakness below current levels, around $22 and $31 respectively, could signal a risk that crypto is facing another washout to the downside."

In broader financial markets, S&P 500 futures and Nasdaq 100 futures were up — gaining 0.41% and 0.67%, respectively. 

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