The cryptocurrency market nose-dived after an internal war between two of the industry's billionaire tycoons hurt investor confidence and led to a mass rout.
The recent drama involves crypto-exchange FTX founder Sam Bankman-Fried and Binance's chief executive Changpeng "CZ" Zhao in a painful display of rivalry that has caused tremours of doubt to reverberate through the whole industry.
These tokens, which should hold parity with the dollar, actually gained slightly against the greenback (GBPUSD=X), due to a pump in their market cap as investors dumped their crypto-holdings and parked their value in stablecoins in an effort to weather the storm.
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It's too early to say whether crypto's civil war is but a momentary redress of the balance of power or a bat signal of distress articulating that investor confidence is shattered good and may never recover.
Since the drama began the combined cryptocurrency market capitalisation has fallen by over 8% in the past 24 hours to $940bn, according to data from coingecko.
This is a considerable fall from the market cap value at the beginning of the week of $1.07tn when the first shot of an internal war between two of the industry's most prominent tycoons was fired.
Since then the value of FTT (FTT-USD) has haemorrhaged a devastating 80% in the past week to $4.62.
Crypto traders holding long positions across all blue-chip cryptocurrencies saw massive losses and questions are being raised over the security of the crypto-lending firms that were bailed out by FTX after the fall-out from May's Terra/Luna crash.
It was on Sunday evening that the first shot of the crypto infight occurred when Binance CEO Changpeng 'CZ' Zhao tweeted that he would dump his exchange's holdings of FTX's native cryptocurrency FTT.
On Sunday, Binance's CZ tweeted: "Liquidating our FTT is just post-exit risk management, learning from LUNA.
"We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards."
Then in a brazenly cynical move on Wednesday, Binance CEO Changpeng 'CZ' Zhao tweeted that he was coming to not only rescue FTX but "to acquire it".
This move came only three days after saying that Binance would dump their entire holdings in FTT, which caused a rout amongst FTX investors.
On Tuesday Binance CEO CZ tweeted: "This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days."
Then Binance's CZ rubbed salt in Bankman-Fried's wound and schooled him in how to run a crypto exchange.
On Wednesday CZ tweeted: "Two big lessons: 1: Never use a token you created as collateral. 2: Don’t borrow if you run a crypto business. Don't use capital "efficiently". Have a large reserve. Binance has never used BNB for collateral, and we have never taken on debt."
The young man at the centre of the current turmoil, Sam Bankman-Fried is no longer a billionaire after seeing $14.6bn of his fortune wiped out overnight.
The FTX CEO has vanished from the Bloomberg Billionaires Index after his estimated personal wealth plummeted nearly 94% to $991.5 million in a single day.
Speaking to Yahoo Finance about the recent turmoil Paulina Jóśków, Head of Business Development at Ramp, said: "Cases like this further emphasise the need for self-custody and infrastructure that is built to support decentralisation. The near collapse of FTX also highlights the urgency to hold centralised entities, like CEXes, accountable for any damage done in such instances. That’s because they’re failing to deliver under its promise to safeguard users' funds. In DeFi this problem is solved by the code, we have self-custody to make sure users aren’t vulnerable when those in charge are being reckless.
“We’ve seen similar instances with Celcius and Three Arrows Capital, centralised, custodial approaches tend to grow faster, but have proven to be much less robust. Ultimately Ramp hopes for a future, where assets are self-custodied by using open-source, auditable technologies. The ethos of decentralisation is still at the core of crypto culture, recent events involving FTX, Celsius and Three Arrows Capital is exactly why we should protect it at all cost.”
Amid all the drama, the blue chips at the top of the cryptocurrency market are bleeding, with bitcoin (BTC-USD) falling over 10% in value over the past seven days, to a subdued $18,305. Ethereum (ETH-USD) fell nearly 19% in the past week to a low of $1,281.
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