Bitcoin Price Tanks Below $16K As Binance Pulls FTX Deal

A day after its short-lived comeback above $20,000 Tuesday, bitcoin plunged below $16,000 while ether dipped to its lowest point in four months

article-image

Markets in turmoil; Source: Shutterstock

share

Crypto and stocks extended their declines Wednesday as investors kept their eyes peeled for pending midterm election results and updates regarding apparently canceled plans for Binance to purchase FTX.

A day after its short-lived comeback above $20,000 Tuesday, bitcoin plunged below $16,000, trading 14% lower as of 4:45 pm ET. Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level Wednesday afternoon. Nearly two months after the Merge, ether turned deflationary Wednesday as the supply decreased thanks to heightened transaction demand and surging gas fees. 

The decline does not come as a surprise to analysts, who said volatility is to be expected given the uncertainty around FTX’s solvency and legal standing, plus concerns that Binance’s rescue, which was initially well-received, may not be coming.

Future of FTX in doubt as Binance gets cold feet

As some predicted, Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX.

Loading Tweet..

Stefan Rust, CEO of immersive web tech agency Laguna Labs, said Tuesday he thought it was “highly unlikely” Binance’s acquisition of FTX would ever come to fruition, adding that Binance CEO Changpeng Zhao was simply “trying to stem the blood flow.”

Sam Dibble, a partner at law firm Baker Botts, also had questions about whether the deal would close. He told Blockworks Wednesday — just before Binance said it would no longer pursue the acquisition — that he looked at the company’s move as “an attempt at market confidence building.”

Dibble had said the intended transaction could turn into more of a financing deal.

“Binance could say, ‘Well we were thinking of acquiring the company, but it turns out really what we want are the assets and not the liabilities,’” he said. “These types of changes in structure of a deal happen all the time in [mergers and acquisitions] when you have a non-binding term sheet like this.”

“I imagine transparency surrounding the size of the hole in FTX’s balance sheet, and presumably the liquidations and bankruptcies that may follow, will be maximum blood within crypto,” Matt Fiebach, research analyst at Blockworks, said. 

Stocks join crypto down sharply ahead of Thursday’s CPI print

Outside of the crypto carnage, equities tumbled, too. The S&P 500 and Nasdaq Composite indexes closing 2.1% and 2.5% lower, respectively. Uncertainty about the future of Federal Funds Rates, which Federal Reserve Chairman Jerome Powell hinted could hit 5%, coupled with election results still trickling in after the close, has traders alarmed. Meanwhile, the dollar index (DXY) was up 0.75%, reversing Tuesday’s slide.

“The current situation reflects relative improvement in the outlook as spiking global yields are no longer pressuring stocks,” Tom Essaye, founder of Sevens Report Research said. “But that’s about the only positive we saw over the past month.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Strive board member Ben Werkman expects thousands of firms to hold BTC, if only “to protect themselves”

article-image

To date, 12.6 million humans have scanned at a World Orb

article-image

One small step for man, one giant leap for Bitcoin

article-image

Jay Woods, Chief Global Strategist at Freedom Capital Markets, said it would be “very rare” for an acquisition to happen since the IPO may occur as soon as next week

article-image

Sponsored

Money is one of the most consequential pieces of infrastructure, and M0 believes its architecture should serve builders, not extract from them

article-image

The financial backwaters they laughed at might be the only thing keeping the dollar afloat