- FTT price has plunged by more than 95% from its highest point this week.
- It crashed as more revelations about FTX emerged.
The FTX Token price plunged once again on Monday as more revelations about the company’s challenges remain. FTT plunged to a low of $1.36, which was about 95% below the highest point this month. Its total market cap has crashed to $469 million. So, will the FTT price plunge to zero?
Why is the FTT price plunging?
FTX made headlines this month as the company suffered a major bank run. As a result, the firm, which was the second-biggest crypto exchange in the world, decided to file for Chapter 11 bankruptcy last week. Its other related entities like FTX US and Alameda Research also filed for bankruptcy.
In the aftermath of this collapse, most cryptocurrency prices have plunged, with Bitcoin trading at $15,800. Other coins like Ethereum, Solana, and Cardano have also crashed, pulling the total market cap of all digital currency prices to about $833 billion. At its peak, cryptocurrencies had a total market cap of more than $3 trillion.
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A lot of new information about FTX has come out recently. For example, a major hack happened on Friday that led to people siphoning coins worth over $473 million. Some of those funds have been recovered.
At the same time, regulators in the Bahamas and the United States are assessing the collapse. And most analysts believe that charges will be brought against Sam Bankman-Fried. For one, it was widely reported that customer funds flowed from the exchange to prop up Alameda Research.
Will FTX go to zero?
A common question among crypto traders is whether FTT price will now go to zero now that FTX has gone bankrupt. Besides, FTX existed to provide incentives to traders in the ecosystem. Now, with the FTX gone, what will be its use?
Fundamentally speaking, the FTX Token price should go to zero since it now has no role. However, in the past, there have been a major disconnect between the value of a centralized exchange (CEX) and its exchange.
CEL and VGX are the best examples of this. Celsius Token staged a strong recovery a few months after Celsius filed for bankruptcy. Similarly, VGX price rallied hard after Voyager Digital went burst. Most importantly, Terra Luna Classic and Terra Classic USD are yet to go to zero.
Therefore, a situation where the FTX token price rallies in the coming months cannot be ruled out. This is partly because it will now become a thinly traded coin that is significantly easy to manipulate.
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