The FTX Token (FTT) fell sharply over 30% on the night of November 7. This event comes amidst a media confrontation between the CEO of FTX and the CEO of Binance. While some investors are on the verge of panic, others are wondering about any connection between the two events. The reasons for the crash remain unknown, but it comes just after Binance publicly announced that it wants to liquidate its stake in the FTX token. Bankman-Fried’s platform could find itself at an impasse, especially as rumors swirl about its reliance on trading firm Alameda Research.
FTX token (FTT) crashes below $18
Around 4 a.m. French time, the native token of the FTX platform, $FTT, abruptly collapsed to 20%. Its price fell from around $22 to less than $18. This fall occurs in a general decline phase of the crypto market. However, its suddenness and magnitude raise questions. Data from Coingecko showed that the drop corresponds to a disappearance of more than $600 million in market capitalization. This sum strangely coincides with the $500 million worth of FTT that Binance CEO Changpeng Zhao planned to sell on the market.
For the moment, it is not possible to comment on the real reasons for this sudden drop in FTX token. We can nevertheless cite spot selling, fueled by the liquidations of leveraged traders, among the main catalysts. This incident affected the entire crypto market. Many victims are to be deplored, in particular bitcoin and ether, which suffered respectively a drop of 5% and 8.5%. Solana also fell 16% within hours.
Sam Bankman-Fried tries to calm the climate
Binance CEO Changpeng Zhao’s decision may be related to rumors from a Coindesk report regarding Alameda Research. This is another company of Sam Bankman-Fried which is accused of being dependent on the FTX company. Indeed, the trading company is believed to hold $5.8 billion in FTT alone. Or almost half of the sum of the assets it manages, which is 14.6 billion dollars. One thing is certain, the two companies are in a bad position. The stalling of the FTX token (FTT) then risks leading to the insolvency of Alameda Research.
Faced with this controversy, Sam Bankman-Fried finally spoke on Twitter. He tried to calm things down by declaring that the exchange was “very good” to reassure FTX’s financial health. Bankman-Fried therefore called on FTX and Binance to work together for the good of the ecosystem and its investors. It should be noted, however, that FTX is one of the few companies taking aggressive trading steps to grow its model, in the midst of a bear market. He signed deals with several crypto companies, including BlockFi and Voyager Digital last October.
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