- The FTX token nosedived sharply on Monday.
- Revelations of the relationship between FTX and Alameda emerged.
The FTT Token price crashed to the lowest point since June 19 after the latest revelations about FTX and Alameda Research. FTT plunged to a low of $21.44, which was about 60% below the highest level this year. Other centralized exchange tokens like OKB and Huobi’s HTT also plunged.
FTX and Alameda Research relationship
FTX has become one of the biggest players in the cryptocurrency industry. The company is owned by Sam Bankman Fried (SBF), who has styled himself as the JP Morgan of the cryptocurrency sector.
FTX and FTX.us have raised billions of dollars from investors, giving them a valuation of over $30 billion. According to Bloomberg, Sam Bankman’s net worth has surged to more than $15 billion.
The FTT price came under pressure this week after revelations about the close relationship between FTX and Alameda Research.
Alameda is an offshore company owned by Fried that makes investments in other companies in companies in the industry. According to Crunchbase, it has made 184 investments. The most recent investment was when Near Protocol raised $150 million.
Alameda is also a high-frequency trader. In a report, CoinDesk said that Alameda’s balance sheet was made up of FTT. FTT is the native coin for the FTX ecosystem that makes it possible for users to receive rewards. It is similar to OKX’s OKB, Huobi Token’s HTT, and Voyager Digital’s VGX.
Alameda has a balance sheet of over $14.6 billion. Of these, $3.66 billion is unclocked FTT and another $2.6 billion worth of FTT collateral. At the same time, its liabilities is made up of $292 million of locked FTT.
As a result, there are concerns about the real value of the FTT token and its liquidity. In a statement, Changpeng Zhao of Binance said that his company had sold $529 million worth of FTT token.
In the past, there have been concerns about the real value of centralized tokens. For example, Celsius Network’s CEL still has a market cap of over $239 million months after Celsius went bankrupt. Similarly, VGX has a market value of over $100 million as Voyager Digital emerges from bankruptcy.
FTT price forecast
The daily chart shows that the FTX Token price has been in a strong bearish trend in the past few weeks. In this period, the coin has tested the important support level at $21.95, where it struggled to move below several times this year. It has also dropped below the 25-day and 50-day moving averages.
Therefore, there is a likelihood that the FTT price will soon have a bearish breakout. If this happens, the coin could soon move below $20.
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