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| Representations of cryptocurrencies are seen in front of an FTX logo and decreasing stock graph in this photo illustration made Nov. 10. Reuters-Yonhap |
Com2uS hit hardest by FTX fallout
By Lee Min-hyung
The meltdown of FTX has triggered a chain reaction in Korea's cryptocurrency-linked stocks, which saw their values plummet on the first trading day after one of the world's largest crypto exchanges filed for bankruptcy.
Shares of Com2uS, a game developer which listed its C2X token on the exchange in March, suffered a double-digit decline on Monday, dipping to a new eight-year low. Com2uS shares closed Monday at 61,900 won, down 14.74 percent, from the previous trading day.
Other crypto-related stocks in Korea also went on a losing streak on the same day. Vidente, the single-largest shareholder of Bithumb Holdings, was also hit hard in the aftermath of the FTX collapse. Bithumb is the nation's second-largest crypto exchange.
Vidente shares soared late last year on the crypto industry which was booming at the time, but has since lost steam for an additional rally. The firm's stock price fell by 7.22 percent on Monday. Shares of Woori Technology Investment also declined by 2.08 percent due to the FTX-sparked crypto uncertainty. The company holds an 8 percent stake in Dunamu, the operator of Upbit, Korea's largest crypto exchange.
Market analysts here and abroad expected the crypto market to remain depressed for the time being.
"The shocking breakdown of FTX will cast a longer-standing impact on the market, as a series of unstable signs are detected after the report made headlines during the weekend," said Lee Mi-sun, the chief at Bithumb's research center. "One signal is the recent de-pegging of Tether's USDT stablecoin which was supposed to be pegged to $1. This sparks concern that risks from the FTX scandal will escalate into the overall crypto market down the road. But we still need to wait and see until further details are shared over the incident."
She left open the possibility of the crypto market experiencing an additional adjustment, as FTX-related risk factors are still being detected.
"The market will be able to enter a period of rebound only after the FTX risks are alleviated, but it remains unknown when it will be," she said.
After FTX's abrupt liquidity crisis erupted, the firm's FTT token plummeted by more than 90 percent in less than a week. FTT was traded at around $1.30 as of 11 a.m. Monday. This is a drop of more than 94 percent from the price on Nov. 8.
Other market analysts also hinted at the possibility that the crypto market will face additional downward pressure due to the unprecedented crypto scandal.
"The collapse of FTX and the uncertainty it has brought to the industry has been another damaging blow," said Craig Erlam, senior market analyst at OANDA. "How damaging it will be will depend on what further details appear in the coming days but right now, prices remain under pressure and vulnerable to further sharp declines."
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