The chaos in the crypto space in the aftermath of the FTX drama has led some analysts to issue warnings of a broader contagion risk that could impact most markets already under pressure.
Bitcoin tumbled to November 2020 lows, down nearly 16% on the day, and last trading at $17,029.47. Ethereum dropped to July lows, down 24.5% on the day, and last trading at $1,165.42. According to McGlone, Bitcoin could be the leading indicator in how all of this plays out, noted McGlone. There is an increasing risk that the world's largest cryptocurrency could test support at around $10,000, he added.
"In disasters like we have seen yesterday, the market needs someone to bail out the bankrupt entity in order to save customer funds," Sotiriou said Wednesday."However, when there is no one left to bail out the company, that is when contagion can spread to other companies - in this particular situation, we do not know yet if Binance can/will go through with the deal."