The FTX-Binance drama unfolds and deals a heavy blow on Sam Bankman-Fried’s crypto, the FTT.
FTT, the token created to act as native cryptocurrency of crypto exchange FTX, suffered a massive blow after news broke that Binance is buying the company.
In just a span of 24 hours, the digital asset lost almost 71% of its value and its market capitalization went down from $2.9 billion on Monday to just around $600 million at press time.
According to tracking from Coingecko, the altcoin is changing hands at $4.47. Over the last seven days, FTT declined by 82.3% in the face of the ongoing FTX-Binance tussle.
Moreover, the drama involving the two exchange juggernauts seemed to have taken its toll on the broader crypto market as Bitcoin and Ethereum also declined by 5.7% and 10.5%, respectively.
Woes continue to pile up for this particular asset class as their collective overall valuation dropped by 6.6% and is now below the $1 trillion marker once again.
Image: REUTERS/Dado Ruvic/IllustrationFTX-Binance Brouhaha: FTT Price Cracks Under Pressure
FTT started its downward trend shortly after Coinbase CEO Changpeng Zao announced his company is selling all its holdings of the token. In a Twitter post, Zao said:
“As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books.”
Shortly after that, the FTX native crypto, which was then trading at almost $26, nosedived and briefly settled at $16.
Then, after news about the potential acquisition came out, the crypto’s price went on a freefall that only stopped when the asset was below the $5 marker.
Meanwhile, it was clarified that the U.S. division of FTX will continue to be independent from Binance’s control, although the unit only accounts for 5% of the company’s total revenue. Non-U.S. businesses of FTX are the subjects of a Binance takeover.
Expert Says Development A Disaster For FTX
Blockchain investments company Castle Islands Venture partner Nic Carter shared his thoughts about this developing story that continues to rock the ship of the crypto market.
He said the move, which will basically combine two of the largest offshore exchange platforms today into one entity, is the most dramatic deal he has ever seen from the industry.
Carter added that for Zao and Binance, this is basically a monopoly, while for Sam Bankman-Fried and FTX, it is a complete and utter disaster in the ongoing FTX-Binance squabble.
“The fact that Sam was willing to do this deal suggests that FTX was deeply impaired in terms of the run to the bank that began in the last 48 hours,” Carter said.
Crypto total market cap at $834 billion on the daily chart | Featured image from NBC News, Chart: TradingView.com