Bitcoin surges $1,300 in a fraction of time after Binance and FTX made a deal to fix liquidity.💲💲

The cryptocurrency market cut losses on Tuesday as the two biggest crypto exchanges in the world, Binance and FTX, came to an agreement to fix the latest “liquidity crunch.”Bitcoin was last lower by about 1% at $20,513.00, according to Coin Metrics. Earlier in the day it fell as low as $19,244. Meanwhile, ether was last lower by 2% at $1,560.20

Protective Puts Draw Demand Amid Sell-Off in FTX’s TokenOptions market tied to bitcoin and ether shows renewed bias for puts, perhaps a sign of investor fears that the FTX-Alameda drama may bring another market-wide crash.

Binance made it known that it intended to sell its holding of FTT, although claimed that the move was not related to the balance sheet issues.That started an old-fashioned run on Alameda, as the price of the FTT token plummeted. Earlier today the FTX Token was trading at $14.58, down 30% but has tried to recover since the news of the Binance rescue broke.

Bitcoin Under $21K Ahead of US MidtermsRep. Warren Davidson (R-Ohio) joins “All About Bitcoin” to discuss the future of crypto regulation ahead of the U.S. midterm elections on Tuesday. Plus, the U.S. attorney for the Southern District of New York states that authorities seized 50,676 bitcoin related to the darknet marketplace Silk Road in November. And, Tactive Wealth Advisor Eddy Gifford discusses his outlook for bitcoin (BTC) as the largest cryptocurrency by market cap hovers below $21,000

The largest cryptocurrency is up 6.5% in October and was trading around $20,700 as of 8 a.m. in London on Saturday, while second-biggest Ether has risen 19%. Both tokens dropped in five of the previous six months, and bulls had been putting hope into this month as October has historically tended to be positive for crypto prices.

Battle of Crypto Titans Ends: Binance to Acquire FTX.

Binance agreed to buy rival cryptocurrency exchange FTX, a stunning outcome that followed days of speculation – spurred by a CoinDesk article on Nov. 2 – that FTX and corporate sibling Alameda Research faced a liquidity crisis.The deal – which, like so much else during almost a week of drama, was revealed in tweets – unites two powerhouses of crypto trading. Financial terms were not disclosed, and the transaction does not affect FTX US and Binance.US, which are two separate companies, said FTX’s Sam Bankman-Fried in a tweet.

Binance Moves to Liquidate Its Entire Position in FTX Tokens
CZ’s FTT dump comes after Sam Bankman-Fried stoked the ire of degens with his regulatory proposals.
By André Beganski.

Binance CEO Changpeng “CZ” Zhao said on Sunday that his cryptocurrency exchange is liquidating its holdings of FTT, the native token of rival exchange FTX.

Zhao referenced “recent revelations that have came to light,” but did not elaborate publicly nor respond to a request for clarification from Decrypt.

The decision follows weeks of criticism directed at FTX’s founder and Chief Executive Sam Bankman-Fried for regulatory proposals he put forth in a blog post which recommended restrictions regarding . He has since committed to revising his regulatory position.

Binance received the funds in FTT as part of its exit last year from an early equity position in FTX it had had since 2019. FTX had bought out Binance’s stake in the company through a $2.1 billion mix of FTT and BUSD–the stablecoin native to Binance’s exchange–according to a statement from Zhao.

CZ said the liquidation is expected to take a few months to complete due to market conditions and limited liquidity. It will also be done in a way that tries to minimize the market impact on FTT, he said.

Regardless, FTT has dipped 9.5% over the past day to $23.03 from $25.55, according to CoinGecko, bouncing off of a low of around $22 on Sunday.

On Saturday, 22,999,999 FTT, worth $584 million at the time, was transferred from a wallet to Binance’s exchange, according to Etherscan. That is the equivalent of 17% of the circulating supply of FTT, according to CoinGecko. CZ confirmed the shifted funds were part of the exchange’s move to liquidate its position in FTT.

Zhao stated in a Twitter thread Sunday that the decision to liquidate its position in FTT was not a shot at its competitor. However, one user on Twitter suggested that the selling could have an impact on loans backed in the token.

Caroline Ellison, chief executive of Bankman-Fried’s crypto trading firm Alameda Research, offered to buy Binance’s remaining FTT for a set price of $22 if Zhao was looking to “minimize the market impact” of the move as well.

Binance has been the leading exchange in terms of FTT’s volume in the past day. Over the past 24 hours, Binance accounted for 6.3% of FTT’s trading volume or $95.4 million, according to CoinGecko.

Binance was an early investor in FTX and while the sum of the initial investment has not been disclosed, Zhao had told Forbes around the time of Binances exit, “We’ve seen tremendous growth from them, we’re very happy with that, but we’ve exited completely.”

On Sunday, CZ said that his company usually holds tokens for the long term, but that Binance had held on to its position in FTT for too long.

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