FTT Tanks 28% as FTX Exchange Struggles to Process Withdrawals

Key Takeaways

FTX’s FTT token has damaged essential assist at $21.
The downward transfer was spurred by a lack of confidence within the FTX change.
FTX customers have been withdrawing funds from the change en masse due to fears that it may very well be bancrupt.

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FTX’s FTT change token has fallen to its lowest degree since early 2021. 

FTT Token Breaks Support 

FTX is experiencing a financial institution run, and its FTT change token is struggling. 

The main crypto change recorded report outflows yesterday as insolvency fears intensified. Rumors that FTX may very well be going through monetary difficulties have weighed closely on its FTT token, inflicting it to drop beneath the $21 assist held since early 2021. Recent reviews additionally counsel that FTX is struggling to course of crypto withdrawals as on-chain information revealed none had been processed for a two-hour interval Tuesday afternoon. 

Over the previous 24 hours, FTT has fallen over 28% per the FTX change’s personal spot market information. It reached a multi-year low of $15.40 early Tuesday morning earlier than posting a slight restoration. At its present worth of $15.94, FTT is down over 81% from its bull market excessive of $84.18, achieved on September 9, 2021. 

The FTT selloff is basically due to a pointy lack of confidence within the FTX change. Since November 5, FTX customers seem to have withdrawn large sums from the change due to concern that it may very well be going through insolvency. Per Santiment information, FTX pockets balances of ETH have fallen over 90% as belief in change wavered. Stablecoin balances have additionally registered a steep drop, with CryptoQuant information revealing the change’s reserves have reached a yearly low of $51 million, down 93% over the previous two weeks. 

Last week, a leaked steadiness sheet from Alameda Research raised considerations concerning the FTX-affiliated buying and selling agency’s monetary state of affairs. The doc revealed that Alameda held greater than $14.6 billion in property in opposition to $8 billion in liabilities. However, as most of those property consisted of highly-illiquid tokens such as FTT, SRM, MAPS, and OXY, it raised doubts as to whether or not Alameda may repay its money owed. 

As FTX CEO Sam Bankman-Fried based each Alameda Research and the FTX change, onlookers have lengthy speculated that the pair had been intimately linked. Bankman-Fried has maintained that the 2 firms are separate entities, however this doesn’t appear to have satisfied many FTX customers. The present exodus from FTX stems from fears that Alameda had been utilizing FTX’s liquidity in its buying and selling methods. Now that the buying and selling agency seems to have run out of money, prospects are fearful that FTX could not maintain sufficient funds in reserve to enable everybody to withdraw their funds.

Editor’s notice: A earlier model of this text incorrectly acknowledged that Alameda Research had $7.4 billion in liabilities. The piece has been up to date to notice that the agency the truth is had $8 billion in liabilities, per CoinDesk’s November 2 report. 

Disclosure: At the time of penning this piece, the writer owned FTT, ETH, and a number of other different crypto property. 

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