May 29, 2024

Why is FTX Token crashing? $600 million outflows FTT market cap in a day

With the continued controversy between two main cryptocurrency exchanges – FTX and Binance – and the latter dumping $500 million value of FTT, it’s no shock that FTX token’s value and market capitalization are taking a dramatic hit.

Certainly, the market cap of FTT has dropped from $2.99 billion to $2.36 billion inside 24 hours, as the worth of FTX’s token declined by over 20% throughout the identical interval, in line with the info retrieved by Finbold on November 20.

In different phrases, the native token of Sam Bankman-Fried’s crypto buying and selling platform has misplaced $630 million from its market cap, bleeding it by 21.07% in a single day, as per the latest CoinMarketCap chart.

FTT 24-hour market cap chart. Supply: CoinMarketCap

On the identical time, FTT is altering arms on the value of $17.33, which signifies a 22.95% decline on the day and a lack of 33.95% throughout the week, with a cumulative lower of 28.38% over the earlier month.

FTT 24-hour value chart. Supply: Finbold

On prime of that, FTT futures buying and selling quantity suffered a meltdown too, as noted by the crypto analytics platform Coinalyze:

What occurred to FTX?

As a reminder, it earlier emerged that Bankman-Fried’s enterprise empire of formally comprised two giant entities – the FTX crypto trade and his buying and selling agency Alameda Analysis – the hyperlink between which was confirmed in Alameda’s monetary information that primarily consists of the FTT token.

In response to this revelation, Binance’s CEO Changpeng Zhao announced the corporate’s resolution “to liquidate any remaining FTT on our books” on November 6, with which it proceeded afterward, promoting 22,999,999 FTT value $584,828,174.

See also  Specialists are involved over bankruptcies of crypto lending platforms resulting in a spike of withdrawal of funds

In the meantime, FTX’s CEO took to Twitter on November 7 to state that “a competitor is attempting to go after us with false rumors,” including that:

“FTX is ok. Belongings are advantageous.”

Binance: ‘There isn’t a struggle’

Extra lately, Binance co-founder He Yi said that “the Portfolio Administration crew at Labs determined to promote FTT based mostly on the risk-control metrics we monitored.” Denying the allegations that the 2 exchanges had been at one another’s throats, she added that:

“The purpose we’d wish to stress is that the choice to carry or promote a token relies on one’s personal threat urge for food and judgment. Our resolution to promote FTT is a pure investment-related exit resolution, which has nothing to do with “a struggle,” and we’ve got no intention to have interaction in drama.”

Elsewhere, the OKX CEO warned that the present developments may have far-reaching penalties:

“If, sadly, FTX turns into one other LUNA, no person within the trade can profit from the accident, together with Binance. Each prospects and regulators will lose some confidence about the entire trade. I hope CZ can take into consideration cease to promote FTT and make a brand new cope with SBF.”

Additionally it is value noting that, amid all of the controversy, crypto trade BitMEX lately introduced the upcoming itemizing of two new FTT perpetual contracts on its community, permitting customers to commerce FTT through its FTTUSD and FTTUSDT listings, “with as much as 50x leverage.”

Disclaimer: The content material on this web site shouldn’t be thought-about funding recommendation. Investing is speculative. When investing, your capital is in danger.