The FTX-Binance Drama Caused FTT To Lose $2.5 Billion Market Value Overnight

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Last Updated on November 9, 2022 by Bitfinsider

The unfolding FTX-Binance controversy deals a huge blow to Sam Bankman-Fried FTT’s cryptocurrency.

FTT, the token designed to serve as the native cryptocurrency of crypto exchange FTX, took a severe hit with the announcement that Binance will acquire the company.

In just 24 hours, the digital asset lost over 71% of its value, and its market capitalization dropped from $2.9 billion on Monday to roughly $600 million as of press time.

According to data compiled by Coingecko, the altcoin is currently being traded for $4.47. FTT has decreased by 82.3% over the past week due to the ongoing FTX-Binance conflict.

In addition, the drama surrounding the two exchange titans seems to have weighed on the broader crypto market, as Bitcoin and Ethereum fell by 5.7% and 10.5%, respectively.

As a result of a 6.6% decline in its collective valuation, this asset class is once again valued at less than $1 trillion.

FTT Price Collapses Due to Pressure

A few days after Coinbase CEO Changpeng Zao said his company is liquidating all of its FTT holdings, FTT began its downward trend.

Source: Twitter

Following this, the FTX native cryptocurrency, which was trading for about $26 at the time, plummeted and momentarily settled at $16.

Then, following the announcement of the probable acquisition, the price of the cryptocurrency plummeted until it fell below the $5 threshold.

In the meantime, it has been clarified that the U.S. division of FTX will remain independent from Binance’s control, despite contributing only 5% of the company’s overall revenue. Non-U.S. businesses of FTX have been acquired by Binance.

Expert: FTX’s Development Is a Disaster

Nic Carter, a partner at the blockchain investment firm Castle Islands Venture, commented on this emerging narrative that continues to roil the cryptocurrency market.

According to him, the move, which will effectively merge two of the major offshore exchange platforms into a single firm, is the most momentous merger the sector has ever seen.

Carter noted that for CZ and Binance, this is essentially a monopoly, and for Sam Bankman-Fried and FTX, it represents a catastrophic failure in the ongoing FTX-Binance dispute.

“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 added.

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