While the start of the week has been punctuated by the FTX affair, the storm threatening the platform has finally erupted in the cryptocurrency market. FTX’s FTT token tumbled 25% in a matter of minutes, closely followed by Solana (SOL) and nearly all digital assets.
FTT is down over 25%
At around 4 a.m. last night, the FTT token on the FTX cryptocurrency exchange suddenly plummeted, creating panic among investors. The price of the token fell by more than 25% in just a few minutes, from $22 to less than $17.
FTT price movement against the USD in 15 minute time scale.
This news comes in the midst of a media storm for the FTX platform and its CEO, Sam Bankman-Fried. This was initiated when its main competitor and CEO of Binance, Changpeng Zhao, publicly announced that he wanted to offload all of the FTT tokens he held.
This is due to rumours from a Coindesk report that Alameda Research, another Sam Bankman-Fried company, is close to insolvency in the event of a sharp fall in the FTT token. Indeed, the trading company alone would hold $5.8 billion in FTT cryptocurrency, more than the amount in circulation.
The principal concerned finally spoke out last night on Twitter. He was keen to reassure FTX’s financial health, before calling on Changpeng Zhao and Binance to work with FTX for the good of the ecosystem and its investors who could suffer from this media war.
How to explain this fall
According to Coingecko’s data, this drop corresponds to a disappearance of more than $600 million in market capitalization for the FTT token of the FTX platform. At present, it is impossible to say with certainty the source of this sudden drop.
Obviously, the main competitor Binance appears to be the ideal culprit, especially since this event strangely coincides with the $500 million FTT that Changpeng Zhao was planning to sell on the market.
However, one should not jump to conclusions. There are other possible explanations, including simultaneous selling by a large number of investors, fuelled by the cascade of liquidations by leveraged traders.
Still, the entire cryptocurrency market suffered from this event. While Bitcoin (BTC) is down 5%, Ether (ETH) is down 8.5%. Other casualties include the Solana (SOL), which is strongly supported by Sam Bankman-Fried, losing 16% in a few hours.
We’ll know a bit more later today thanks to the on-chain analysis of our expert Le Prof. Chaîne, which you can find exclusively on our private group Le Grille-Pain. In addition, we will keep you informed of any new developments by regularly updating this article
