FTT cryptocurrency drags the entire crypto market down

Cryptocurrency giant FTX, which fell 30% overnight, sent the two major cryptocurrencies, bitcoin and ether, tumbling. A situation reminiscent of the collapse of Terra Luna.

The cryptocurrency market is in the red this morning as fear resurfaces. This Tuesday, around 04:00 French time, the FTT cryptocurrency, held by the FTX platform, fell by 30%, falling below $16. As of 9:45 a.m. Tuesday, the token rose slightly and is trading around $18.

The sharp fall of this token created an unprecedented turmoil in the cryptocurrency market overnight. The two major cryptocurrencies thus fell by more than 5% each, with bitcoin falling from $20,648 to $19,485 between 4:00 a.m. and 6:30 a.m. French time. Similarly, Ether fell from $1,572 to $1,446 at the same time. While for two weeks the two cryptocurrencies had managed to cross their psychological thresholds, here they are shocked again. And that’s not reassuring for investors, who don’t have short memories and remember the upheavals of this summer.

Alameda search bankruptcy rumors

As a reminder, the fall of FTT is part of a context of the rumored bankruptcy of Alameda Research, the trading platform of FTX. This rumor appeared when the specialized media Coindesk published information that the funds held by Alameda Research were mainly FTT, the token launched by the FTX platform.

Specifically, this means that the company is primarily based on a cryptocurrency and that in the event of a sharp decline in it or a feeling of distrust from investors who decide to get rid of it, Alameda Research risks being bankrupt. However, Alameda Research is not just any company, it belongs to the giant FTX, which has confirmed its resilience during the last two crypto crashes. Such a situation is reminiscent of the Terra Luna episode, where the Terra ecosystem was mainly based on the stablecoin terra usdt. We recall that the fall of this stablecoin dragged the ecosystem into an unprecedented crypto crash in May.

If the information from Coindesk was denied a few days later by the head of Alameda Research, it was not enough for the head of Binance, Changpeng Zao. On Sunday, the latter announced that the platform intends to sell all of its FTT, as Binance has purchased approximately US$2.1 billion in busd and ftt following a transaction with FTX.

To limit the impact on the crypto market, CZ said that Binance will sell its FTTs for several months. However, a transfer of more than 20 million FTT was made over the weekend, or $530 million at the time of the transfer. CZ later confirmed that Binance had contributed to such a transfer. After that, the price of FTT crypto fell by more than 14%.

Towards a new episode of Terra Luna?

While analysts consider that the FTX and Binance platforms have entered into a “war” in the context of the resale of this token, CZ indicates that the sale of this asset is part of the desire for “risk management” to deal with the lessons learned. ” from the Terra Luna affair.

On Monday, FTX boss Sam Bankman-Fried wanted to reassure investors. “FTX is doing well, our assets are doing well,” said the latter. This probably did not calm investors, who decided to get rid of this cryptocurrency, which fell 30% overnight.

We already know that many bosses, from the Terra ecosystem to Celsius, have already sought to appease investors when their company was threatened with bankruptcy. It remains to be seen whether the crypto market will succeed in coming out of this new FTT issue, because if the trading company FTX were also in trouble, we could fear a new Terra Luna episode which could create a new turmoil in the market. .

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