FTT plummets 80% and trader loses $990 million; BTC drops 12%
Binance CEO was not wrong in comparing the systemic risk of FTX Token (FTT) to that of Terra (LUNA). Bitcoin and other cryptocurrencies are facing declines as the FTT melts.
Bitcoin (BTC) has once again hit $17,600, very close to its low point in this bear market, which has intensified with the collapse of the Terra Luna ecosystem (and its flawed stablecoin system).
As we showed earlier, everything started to go wrong for FTT when a report circulated on social media showing that the balance sheet of Alameda Research, the research arm and crypto fund of FTX, was composed of cryptocurrencies with low liquidity.
This and possibly other factors led Binance to start selling $500 million worth of FTX Token on the open market starting Sunday (6). Understand more by reading the article “Why is Binance pouring millions into FTX Token?”.
Today, the decline has intensified and FTT is trading at just $4.68 at the time of writing. This represents an 80% one-day low and a 94% collapse from its all-time high.
FTX Token price this Tuesday. Chart: CoinMarketCap.com
The eviction was so strong that it caused a mass liquidation of investors who had been betting on the FTX exchange’s token bull. The BXRekt account reported a single trader loss of $990 million, settled at $7.25.
Liquidated long on FTTUSDT: Sell 990,624,000 @ 7.25 🏅🏆💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯— REKT (@BXRekt) November 8, 2022
But unfortunately, even with Binance’s commitment to buying FTX and solving liquidity issues, the impacts have spread to the rest of the cryptocurrency market. As the Lookonchain profile showed on Twitter, the main cryptocurrencies that could be impacted by an FTT collapse were the following:
Bitcoin in the midst of this, and being clearly an insured currency by almost every player in the market, has suffered the consequences along with solana, aptos, ether and other cryptos.
To date, BTC is down around 12% to around $18,200 (having seen a lower bottom in the $17,000s), ether nearly 18%, and aptos and solana, more correlated with being assets that FTX has invested in. at the beginning, they plummeted by 27% and 26%, respectively.