The collapse of FTX has put the cryptocurrency market and the companies that cooperate with FTX in a very difficult situation. So much so that BlockFi, which is among the companies associated with FTX, became the first crypto company to go bankrupt after the collapse of FTX.
BlockFi Flags Bankruptcy
The bankruptcy of FTX continues to affect the cryptocurrency market and its affiliated companies. Announcing that it suspended its withdrawals on November 11, BlockFi went bankrupt.
BlockFi, which previously stopped shooting operations with the collapse of Terra, but then entered the process of purchasing by FTX, was on the verge of bankruptcy with this event. Continuing to carry out its activities with the support of the FTX exchange, BlockFi went bankrupt with the collapse of FTX.
BlockFi wasn’t the only exchange on the brink of bankruptcy after the Terra crash. Other companies, such as Celsius and Voyager, were also in trouble. Sam Bankman Fried lent a helping hand to BlockFi, saying the industry needed a bailout at the time. BlockFi also said yes to FTX, rejecting the offer from another crypto lending firm, Nexo. At that time, Next company’s offer was higher than FTX’s offer. At this point, the FTX stock market, which previously saved the BlockFi company from bankruptcy, collapsed, causing the BlockFi company to go bankrupt.
BlockFi Sues SBF
BlockFi’s bankruptcy filing further clarified FTX’s collapse. BlockFi sued Bankman-Fried over shares of Robinhood that were pledged as collateral in early November. In its complaint, BlockFi showed that Alameda Research defaulted on $680 million in secured loans in early November. At the same time, the information that an unnamed ordinary share was pledged as collateral is also included in the complaint file. According to the report of the Financial Times, Bankman-Fried, who was trying to raise funds before the bankruptcy of FTX, was trying to sell Robinhood shares after entering a collateral agreement with BlockFi.
2022 has not been a good year for the cryptocurrency market. After the Terra collapse, the FTX crisis, the increasing coronavirus cases in China, now BlockFi’s bankruptcy news has come. Let’s take a look at how this bankruptcy event, which happened while the market has not recovered yet, will affect the market in the coming days.
What Happens in the Future Process?
Despite these bad news, as we just mentioned, the Bitcoin price showed great resistance and managed to not fall for the time being. It is estimated that the main reason why Bitcoin, which has risen to the level of $ 16,500, did not collapse, is short positions. According to some expert comments, the price of Bitcoin may drop sharply compared to the bear pennant in the coming days and regress to the level of 12 thousand dollars.
According to data shared by digital asset manager CoinShares, $23 million in funds outflowed from institutional funds in the crypto money market last week, while $9.2 million in money inflows to the short Bitcoin fund. In the shared data, it was announced that the most fund outflow was experienced in Bitcoin, while it was stated that outflows were generally seen from altcoins.
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