Bitcoin steadies near $17K

The collapse of FTX continues to generate shockwaves and tough questions. Early Monday, Bitcoin, closely watched standard bearer of an industry knocked back on its heels, appears to have steadied at about $17,000 on a 3% gain in the past 24 hours, as of 8:45 a.m. (EST).

Total global crypto market capitalization stood at $893 billion. On Sunday, that global market cap level reached as low as $831 billion. It has fallen by 18%, from $1 trillion, in the past fortnight.

On Friday, FTX filed for bankruptcy and Sam Bankman-Fried resigned as CEO. A dumpster fire on a wrecked train filled with black swans, or some word salad to that effect, one Yahoo Finance commentator lamented in a podcast. The fall of FTX has dented confidence in the sector one year removed from its highest highs, while igniting howls for regulations. That they might finally arrive was embraced as crypto’s best-case scenario at this point, and possibly even a fresh catalyst.

Still, FUD, gossip, theories and speculation rain down in a torrent of bewilderment. Did SBF flee to Argentina on a private jet? "Nope," he reportedly texted to a Reuters correspondent.

Bahamian police and regulators interviewed SBF on Saturday, Bloomberg reported.

Cointelegraph said he was "under supervision" in the Bahamas.

Yahoo Finance reports that Bahamian law enforcement officials "are forcing [SBF] to stay in the Bahamas." That was as of Saturday night, following rampant speculation on Twitter that SBF and other top executives were on the move.

Harnessed to Alameda tied to FTX in a headfirst bungee jump, Solana has been gut-wrenched in recent days, spending the better part of Sunday falling below $13. But it has rebounded somewhat over 24 hours, prompting a fresh round of speculation as to whether the worst might be over. SOL was roughly $14.50 as of Monday morning at 8:15 a.m. (EST), having declined 56% over the past week.

Solana crashed from $38 to $12 amidst the chaotic collapse of FTX and affiliated trading firm Alameda, one of the largest holders of SOL. “The price has managed to find some support at $12, but the sell-off may not be over,” CryptoPotato said. The current resistance is at $15. However, buyers seem scarce.

Another major casualty of the FTX debacle was Serum, a DEX created by a consortium of partners including FTX, Alameda, and the Solana Foundation. Serum saw its native asset SRM plummet 70% since last Monday.

Meanwhile, the FTX crisis placed a trove of prized Bored Apes at risk of liquidation, CoinDesk said, noting NFT collective Yuga Labs' financial ties with FTX Ventures.

Alameda wound down owing FTX billions in mishandled customer assets, SBF reportedly told some potential saviors last week, conceding that lending his twin sister money was probably a bad idea.

On Thursday, one day before it filed for bankruptcy, FTX reportedly was looking at $9 billion in liabilities versus less than $1 billion worth of liquid crypto. But even that stash wasn't secure. On Friday night, Yahoo Finance said, some $663 million in digital assets flowed out of wallets linked to the now bankrupt exchange. “Unauthorized access to certain assets has occurred,” said John Jay Ray III, freshly installed CEO and chief restructuring officer.

Most but not all of the activity is suspicious. FTX moved some $186 million to cold storage for safeguarding, according to Elliptic, a blockchain analytics firm.

As for the rest of the mysterious outflows (deemed unauthorized), it seems a chunk of the loot turned up on U.S.-based crypto exchange Kraken, the company’s chief security officer said on Saturday, flagging a user trying to sell/transfer the allegedly heisted FTX funds. “We are committed to working with law enforcement to ensure they have everything they need to sufficiently investigate this matter,” Kraken said.

All in all, FTX had $16 billion in customer assets, the Wall Street Journal reported. Sources told the WSJ that FTX lent more than half of its customer funds to its trading affiliate, Alameda Research, which made risky bets, setting up the empire to spectacularly collapse.

“We can expect this will be a very messy public trial that will lead to bad publicity and regulatory backlash for the crypto industry,” predicted Haseeb Quershi, a managing partner with FTX-exposed DragonFly Capital, speaking to Yahoo Finance.

Sour takes echo across the space. CoinDesk did a round-up of analysts’ commentaries, mostly dire. For example, Sean Farrell, head of digital-asset strategy at FundStrat, said that “we have witnessed the unraveling of a web of leverage that entangled the crypto space. It started with LUNA/UST, seemingly resolved in the 3AC unwind, only to find that SBF now appears to have been insolvent as well.”