"Don't stay up late. Staying up late not only hurts your body, but also hurts your wallet." On the morning of November 9, some investors in the currency circle sighed. For most workers who just woke up from their sleep, the night was calm;

"Don't stay up late. Staying up late will not only hurt your body, but also hurt your wallet." On the morning of November 9, some investors in the currency circle sighed.

For most workers who just woke up from their sleep, the night was calm last night; but for people in the currency circle, the cryptocurrency market last night was a "bloody rain".

Last night, the cryptocurrency market almost plummeted after a brief rise - Bitcoin and Ethereum, the largest market value, both fell by nearly 20%; FTT even collapsed directly, with a drop of more than 30% in one hour and a drop of more than 70% in 24 hours...

As the sharp drop, the wealth of many crypto investors shrank sharply. Those crypto investors who stayed up late last night with leverage to make contracts, the assets in their accounts were instantly wiped out.

According to coinglass data, as of 11:00 on November 9, a total of 414,800 people on the entire network have been liquidated in the past 24 hours, with the total amount of liquidated in US$904 million, or approximately RMB 6.5 billion. The largest amount of liquidation was US$6.7044 million.

What happened to the cryptocurrency circle last night? Why do cryptocurrencies such as BTC and FTT suddenly plummet? Phoenix.com "Eye of the Storm" learned that behind the "bloody storm" in the cryptocurrency circle last night was the continuous fermentation of the "war" between the two cryptocurrency giants Binance and FTX.

What happened behind the sharp drop in the currency circle?

A Twitter from Binance founder Zhao Changpeng (CZ) opened the ups and downs of the cryptocurrency market last night.

html In the early morning of November 9, Zhao Changpeng suddenly announced on social platforms that he planned to acquire his competitor FTX. He said in his tweet: "This afternoon (North 8th local time in the United States), FTX asked us for help due to a serious liquidity tightening. To protect users, we signed a non-binding letter of intent, which Binance intends to acquire (FTX). We will conduct a complete investigation into this matter in the next few days."

"There is a lot to cover and it will take some time. This is a highly dynamic situation and we are evaluating it in real time. Binance has the right to exit transactions at any time. As the situation develops, we expect the price of FTT to fluctuate significantly in the next few days," Zhao Changpeng added.

At the same time, FTX founder Sam Bankman-Fried (SBF) also said on social media: "Things have ended successfully, and FTX's first investor and the last one (both Binance). We have reached a strategic trading agreement with Binance (waiting for due diligence)."

This also means that the "war" that lasted for several days between the two largest cryptocurrency exchanges in the world is about to be settled. The market also reflected this positive news. BNB once rose to US$398, with an hourly increase of exceeding 20%; FTT rebounded from US$14.5 to US$21.2, with a maximum increase of 46%; BTC and ETH also returned to above the 20000, 1500 and other marks.

However, just as everything was moving in the ideal direction, a rumor that "acquisition may be blocked by antitrust" caused the market to take a sharp turn for the worse.

Associate Professor Thibault Schrepel, an associate professor who specializes in blockchain and antitrust issues at the University of Amsterdam, wrote in CZ's tweet: "Please check if this complies with antitrust law before tweeting. I wouldn't be surprised if this tweet appears in the upcoming antitrust lawsuit."

Thibault explained that in the United States, antitrust laws such as " Sherman Law " prohibit direct competitors from taking action to protect each other, while CZ mentioned in the tweet "in FTX He has stepped in to protect users after facing severe liquidity tightening and seeking help," which means there is an illegal agreement that U.S. law may apply to this incident as the deal affects the entire company, including its U.S. business.

At the same time, Spoke Steven Adamske, spokesman for the U.S. Commodity Futures Trading Commission (CFTC), also said that the CFTC is paying attention to the FTX event dynamics, but any regulatory issues are not clear at present.

"acquisition" became an uncertain event, and the market panicked again. BTC fell below $17,000 at one time, and ETH fell below $1,300 at one time. Due to the personal admission that FTX had liquidity tightening in the acquisition announcement, FTT collapsed directly, falling to US$2.5 at the lowest, with a drop of more than 70% in 24 hours.

crypto giant, publicly "fighting"

In fact, before the two sides announced the news of the "acquisition", the "war" between Binance and FTX had lasted for several days.

The earliest cause of the entire incident can be traced back to November 2. The cryptocurrency news website CoinDesk disclosed a report on quantitative cryptocurrency fund Alameda Research, which alludes to Alamada in bankruptcy crisis and FTX in liquidity crisis.

report stated that in Alameda's balance sheet, FTT is its largest single asset, holding approximately 140 million pieces, with FTT-related assets of US$5.8 billion, accounting for 88% of its net assets, and 140 million pieces account for 70% of the FTT's 200 million pieces of circulation.

Phoenix.com "Eye of the Storm" learned that Alameda Research and FTX are very closely connected, and the founders of both are SBF. Alameda was the earliest and most important market maker of FTX, providing a lot of liquidity to FTX.

Although SBF announced its withdrawal from the management of Alameda fund in May this year, and stated that it would focus on the development of FTX, the market generally believes that the business connection between Alameda and FTX is still continuing. The report of

CoinDesk has caused the industry to begin to doubt the financial relationship and financial situation between Alameda and FTX, and is worried about whether the possible liquidity crisis of FTX will become the "Lehman crisis" in the currency circle.

But given SBF's strong asset strength, the market has only increased the discussion of FTX and alameda, and there has been no major panic or fluctuation. Binance and Zhao Changpeng were still just onlookers at this time.

Until November 5, Binance's co-founder He Yi said on Twitter : Binance does not provide unsecured loans, does not participate in transactions, does not buy companies blindly, and does not spend money to sponsor. 20% FTX's equity has been sold, and he is looking up and doing things with his head down.

Subsequently, Alameda Research co-CEO Caroline Ellison responded on Twitter that the balance sheet disclosed by CoinDesk is only part of the company's assets, and more than $10 billion of assets did not reflect it, and said that most of the loans had been returned.

But unexpectedly, Zhao Changpeng also came to the scene in person on November 6 and took the big move - selling FTT. Zhao Changpeng posted on Twitter: He was worried that FTT would collapse like Luna, and that all FTTs on the books will be sold in the next few months. The 23 million FTTs transferred to Binance account were only part of the obtained after withdrawing from FTX's equity.

Affected by this, FTT short-term fell rapidly, once falling to US$21.4. However, at that time, other mainstream cryptocurrencies including BTC and ETH were not affected much.

Alameda couldn't sit still and immediately expressed his willingness to spend $22 per coin to buy all the FTTs that Binance wants to sell, but many people expressed doubts about whether FTX can really take out $580 million tokens to be repurchased. At this point, the battle between FTX and Binance has entered a state of intense heat.

But Alameda's "bottom support" failed to dispel investors' concerns about FTX. As the market's concerns about the overall liquidity of FTX intensified, a large number of users began to withdraw cash from FTX in a frantically way. Faced with the sudden run, bad signals such as delayed FTX withdrawals soon appeared, which seemed to prove the market's doubts about the liquidity gap on the exchange.

11 around 11:00, the panic that continued to accumulate and ferment, finally broke out. FTT quickly plunged after falling below the $22 mark and once fell to around $15.

This time, The market also began to turn weak, BTC fell below the $20,000 mark, ETH fell below the $1,500 mark, and more altcoins also experienced double-digit declines. SOL, BIT and other projects involved in FTX fell by more than 20%. MIM, a stablecoin with FTT as one of the main collateral assets, also showed signs of deaning.

htmlIn the early morning of November 9, as Zhao Changpeng and SBF simultaneously announced the news of "Binance Acquisition of FTX", the market's concerns about the FTX liquidity crisis were dispelled, and the cryptocurrency market ushered in a brief rise. But soon it was broken by the rumors of "anti-monopoly", and the cryptocurrency market began to plummet across the board.

"The Richest Man in Chinese" defeated the "Current Mother of the Currency Circle"

Although Binance's acquisition of FTX may still face variables, in this showdown between the "Bennial Mother of the Currency Circle" Zhao Changpeng undoubtedly won the final victory.

In fact, before the public "breakup" of "the face was broken up on November 6, the "Game of Thrones" between Binance and FTX had already begun.

In 2017, Zhao Changpeng founded Binance and quickly gained a foothold with spot trading, becoming one of the top cryptocurrency exchanges. As of now, Binance has become the world's largest cryptocurrency exchange.

At the end of last year, Zhao Changpeng also became the richest Chinese with his net worth of US$94.1 billion (approximately RMB 634.8 billion), and also became one of the top ten richest people in the world and became famous all over the world.

Compared with Binance, FTX is a new player in the cryptocurrency track. SBF, the founder of FTX (full name Sam Bankman-Fried) can be said to be a well-known figure in the currency circle. Some people call him, Ethereum founder Vitalik, Binance founder Zhao Changpeng CZ, and Tron founder Justin Sun (Justin Sun) the "Four Heavenly Kings" in the currency circle.

However, SBF is the most famous title of "Central Mother in the Currency Circle". This summer, he encountered Terra (LUNA) and UST in the currency circle. After the epic collapse, SBF invested in acquiring several cryptocurrency exchanges that were in crisis, and was once given the title of "Central Mother of the Currency Circle".

In 2017, SBF resigned from the famous hedge fund Jane Street to join the currency circle. The earliest ones were Bitcoin arbitrage transactions between Japan and the United States. Then it founded the quantitative cryptocurrency fund Alameda mentioned above. Research, focusing on crypto assets market-making and startup crypto asset companies venture capital.

In May 2019, SBF founded the cryptocurrency exchange FTX, and Binance was one of its earliest investors. On December 20, 2019, Binance announced a strategic investment in FTX, which brought the latter's valuation to $1 billion in just a short period of time. In addition, Binance also holds FTT for a long time to help the sustainable development of the FTX ecosystem.

As a result, FTX obtained Huge investment has been able to grow rapidly under the leadership of SBF, while Binance hopes to gain a place in the derivatives trading market. Both can be said to be a win-win situation, and both sides have also spent a "honeymoon period".

However, FTX's growth rate is amazing and it quickly ranked among the top five cryptocurrency exchanges in the world, which also aroused Binance's alertness - if FTX is allowed to develop, its position may be threatened.

Then FTX's round B financing in July 2021 (valuation rose to 18. During the period of $0 billion, Binance announced its withdrawal. By 2022, FTX has become the second-ranked cryptocurrency exchange in trading volume. Although Binance's trading volume is still 10 times that of FTX, the potential of FTX cannot be underestimated.

In fact, FTX has gradually developed the "ambitions" to challenge Binance. According to media reports, SBF hopes to use "political power" to suppress Binance's development in the United States through "regulatory" means. It is reported that SBF is currently one of the largest donors of the entire American political movement, and has donated 3,920 to the Democratic Party campaign in the United States. 10,000 US dollars, ranking 5.

Previously, the help of political power was also regarded as one of the important highlights of FTX and SBF. However, some people believe that SBF's political donations have nothing to do with the suppression of Binance and other competitors.

But many industry insiders believe that Binance's choice to start a war with FTX was the source of the crypto-regulatory bill promoted by SBF not long ago, which included the suppression of Binance. In fact, Zhao Changpeng once "accused" SBF of trying to use political power to suppress competitors on Twitter.

1 On November 7, he said on Twitter: "Liquidation of FTT is just a risk management for exiting later, and it is also learned from the previous lessons of LUNA. Binance has supported it before, but will not pretend to love after divorce. We do not oppose anyone, but will not support those who are lobbying against other industry participants behind the scenes."

After FTX was exposed on November 2 that there may be a liquidity crisis, Binance also keenly seized the opportunity to completely knock down his opponent. From the unexpected sudden selling of FTT to the exerting public pressure, to the final announcement of the acquisition of FTX, the whole process took only one week, which can be described as "fast, accurate and ruthless".

With the plunge in FTT prices and the run on the FTX exchange, SBF, which has been on the Forbes Global Rich List for two consecutive years, has also shrunk significantly. Bloomberg terminal updated its estimate of SBF's net assets on November 8, down from $16 billion the previous day to $991 million, down 93% in one day.

No one expected that SBF, known as the "Central Mother of the Crime Circle", would have repeatedly rescued other companies a few months ago, and was called the "Central Mother of the Crime Circle", which was so vulnerable in front of Zhao Changpeng. FTX, which was previously the second largest exchange in the currency circle, was not only suddenly in a liquidity crisis and was shaky, but was also quickly acquired by its major competitors. I'm afraid no one expected this ending.

Is the "storm" of the crypto market over?

Although both Binance and FTX have announced the acquisition, the "storm" in the cryptocurrency market still seems to have not passed.

1 On November 9, mainstream cryptocurrencies such as Bitcoin and Ethereum continued to fall. After a brief rise, Bitcoin fell below $18,000 again, and Ethereum even fell below the $1,200 mark. Arthur Hayes, founder of

BitMEX, said: "FTX is Lehman in the cryptocurrency world. The market has not yet bottomed out. The price of Bitcoin at $17,500 is still risky."

However, although the entire crypto market has suffered heavy losses due to the liquidity crisis of FTX, not all of this incident seems to be negative. The experience of FTX has caused major cryptocurrency exchanges to begin to reflect on themselves and actively disclose their own asset reserves.

Zhao Changpeng tweeted that two lessons can be learned from this FTX incident: 1. Do not use the tokens you created as collateral. 2. If you run a cryptocurrency business, please do not borrow. Do not use capital effectively. A large amount of reserves must be guaranteed. Binance has never used BNB as collateral and has never assumed debts.

In addition, Zhao Changpeng also stated that crypto exchanges should not implement a partial reserve system like banks, and all crypto exchanges should disclose reserve certificates. Binance will soon start making reserve certificates to maintain full transparency.

Then OKX Exchange also announced plans to release a reserve certificate within the next 30 days; another cryptocurrency exchange Bitget also said it will publish a reserve certificate.

However, the "negation" voice for the cryptocurrency market still exists. Many people who "oppose" cryptocurrencies said: "The FTX incident further illustrates the hypocrisy and fragility of the crypto market."

"Black Swan" author Taleb tweeted this morning and mocked the whole incident, saying that "there is no liquidity crisis in the crypto asset circle - the liquidity crisis only occurs on those financial assets with stable intrinsic value, and this is just a crisis."

And it seems that Binance's acquisition of FTX will be smoothly finally, it seems that it is not completely certain. According to Bitcoin Magazine, Steven Adamske, spokesman for the U.S. Commodity Futures Trading Commission (CFTC), said that the situation is being paid attention to, but "no regulatory issues are currently clear."

If Binance's acquisition of FTX ultimately fails, the crypto market will undoubtedly usher in a "Lehman crisis" again.