Bitcoin and altcoin projects have been hit hard by the shock collapse of the sprawling FTX empire. Fears suddenly rose around other crypto companies. Meanwhile, a company known for short selling positions in the market focused on an altcoin. Here are the details…
Citron shorts the leading altcoin ETH
Bitcoin price was almost $70,000 at this time last year, as we reported on cryptokoin.com. Now, it has dropped below $17,000 per Bitcoin. Even as Wall Street giant JPMorgan made a big bet on crypto, Ethereum also fell in price from last year’s all-time highs. Now, Citron Research, which has suffered a huge loss since it shorted its bet against GameStop due to the retail trading boom last year, has chosen Ethereum as its new short selling target.
This development comes just weeks after Ethereum co-founder Vitalik Buterin issued a “controversial” statement. Buterin’s statement pointed to a warning of crypto adoption. The collapse of cryptocurrency exchange FTX and the fall of founder Sam Bankman-Fried, commonly known as SBF, seem to be the main reasons Citron took the position. Citron used the following statements in a Twitter post:
[Citron’s] short sale reignited the flame. Because it proved to be like many stocks that rose through misunderstanding. Someone did their homework.
We continue to be short ETHER as we believe this $130 bil token has as many common sense flaws as does the whole SBF story.
— Citron Research (@CitronResearch) November 14, 2022
Citron points to ‘open’ on ETH
Citron continued to comment on the $130 billion Ethereum, which is the second largest cryptocurrency after Bitcoin and the basis of many smaller cryptocurrencies. He stated that ETH has “many common sense flaws.” Announcing the bankruptcy of FTX, which reportedly has a $10 billion deficit on its balance sheet, last week, SBF has built a reputation as a key political donor and crypto regulatory lobbyist. “The U.S. government should be ashamed for letting someone get this close to government sanctuary and influence without even checking their tax return,” Citron added.
The Ethereum price has dropped over 70 percent since this time last year, as the spree of retail trading via apps like Robinhood, Coinbase, and similar eases. It has lost value along with Bitcoin and other major cryptocurrencies. In July, Andrew Left, founder of Citron, one of the world’s best-known short selling companies, described cryptocurrencies as a “fraud” in general.
Citron stopped issuing reports of short selling in January 2021 after it was forced to close its open position on GameStop due to a frenzied individual purchase. However, he said that he will now resume broadcasting, citing the FTX crisis as the reason. “Maybe it’s time to finally listen to the skeptics rather than criticize them,” Citron said.
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