Bitcoin Just Took a Massive Hit To The Chest. Is There a Crypto Doctor in the House?

If you've bought Bitcoin recently, you might be fighting the urge to sell after the catastrophic drop in value. They say you only lose if you sell. Bitcoin has had its darkest day in a long time. On Wednesday, November 9, 2022, Bitcoin saw a drop of 14% in three hours. That's a drop of roughly 4.66% per hour in value.

The liquidity issues at FTX have driven a stake through the heart of Bitcoin and, subsequently, all other cryptocurrencies that jump off the same bridge when Bitcoin does. Ethereum dropped 17% in the space of 24 hours.

However, Binance has agreed to purchase FTX and help with its liquidity issues.

https://twitter.com/SBF_FTX/status/1590012124864348160

Confirming the news, CZ took to Twitter to confirm a letter of intent had been signed. The purchase is contingent on due diligence being done before it is final. So, we are not out of the woods yet. Who knows what is looking in the books over at FTX?

https://twitter.com/cz_binance/status/1590013613586411520

And if you have funds over at FTX, remember that Binance can pull out of this deal anytime. If so much as one other red flag is found during the due diligence process, the deal will be called off, and you'll see a far more catastrophic effect on the crypto market than we are seeing now. For all we know, this is a ruse from Binance to buy time to sell their FTT tokens and then exit the deal.

We've seen these events before, and Bitcoin has made it to the other side. But, coinciding with a cost of living crisis, global instability and inflation that doesn't seem to be going anywhere but up, it feels like a perfect storm.

I've been in crypto too long to know that Bitcoin won't die. It is far too propped up by institutions, funds and small hodlers to ever go to $0. However, I still remember the fear like it was yesterday when Mt Gox collapsed, and the possibility of Bitcoin going to $0 was real. We could see some smaller tokens collapse as we did with LUNA if conditions continue to be bearish and volatile.

If anything, it's a good opportunity for crypto to have a much-needed reset. Think of these events as a crypto recession. The good projects will remain, their prices will fall to reasonable and accessible levels, and over time the good tokens will see their values go up, and all will be well.

One thing I know for certain, Binance is a better-run exchange than many of these other amateur operations run by children, so the irony is somewhat lost on me. CZ seems to know what he is doing and has built a company of capable people to deliver on that mission.

So, if CZ follows through on the deal and solves the liquidity issues, all will be well. If they don't, things will 100% get worse, and we might see a return to low 2017 levels.

In the meantime, get out your surfboards and hold on: