Cryptocurrency giant FTX, which fell 30% overnight, sent the two major cryptocurrencies, bitcoin and ether, swinging. A situation reminiscent of the collapse of Terra Luna.
The cryptocurrency market is in the red this morning, with fears resurfacing. This Tuesday, around 4:00 a.m. French time, the FTT cryptocurrency, held on the FTX platform, fell by 30%, falling below 16 dollars. At 9:45 am on Tuesday, the token rallied a bit and was trading at $18.
The sharp fall of this token created an unprecedented chaos in the cryptocurrency market overnight. The two main cryptocurrencies thus fell by more than 5% each, bitcoin fell from 20,648 dollars to 19,485 dollars between 4:00 am and 6:30 am French time. Similarly, Ether fell from $1,572 to $1,446 at the same time. While for two weeks both cryptocurrencies were able to surpass their psychological thresholds, here they were shaken again. And this is not reassuring for investors, who do not have a short memory and remember the turmoil of this summer.
Alameda Research Insolvency Rumors
As a reminder, the fall of FTT is part of the context of the reported insolvency of Alameda Research, the trading platform of FTX. This rumor appeared when the special media Coindesk published the information that the funds held by Alameda Research are primarily FTT, the token launched on the FTX platform.
Concretely, this means that the company is primarily based on a cryptocurrency, and that in the event of a sharp fall in it or a feeling of distrust from investors who decide to take it Abandon it, Alameda Research risks that insolvent. . However, Alameda Research is not just any company, it belongs to the giant FTX, which proved its strength in the last two crypto-crashes. Such a situation is reminiscent of the Terra Luna episode, where the Terra ecosystem was primarily based on the stablecoin terra usdt. We remember 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 ago by the boss of Alameda Research, it was not enough for the boss of Binance, Changpeng Zao. On Sunday, the latter announced that the platform intends to sell all of its FTT, Binance acquired approximately 2.1 billion US dollars in busd and ftt after an FTX transaction.
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 at the end of the week, or 530 million dollars during the transfer period. CZ later confirmed that Binance contributed to such a transfer. After that, the price of crypto FTT fell by more than 14%.
To a new stage in Terra Luna?
While analysts consider that the FTX and Binance platforms entered a “war” in the context of the resale of this token, CZ indicated that the sale of this asset is part of a desire for ” risk management” to deal with lessons “learned” from the Terra Luna event.
On Monday, FTX boss Sam Bankman-Fried wanted to reassure investors. “FTX is doing well, our assets are good,” said the latter. This probably did not reassure the investors, who decided to get this cryptocurrency, which fell 30% overnight.
We already know that many bosses, from the ecosystem of Terra to Celsius, are already trying to reassure investors if their company is threatened with insolvency. It remains to be seen if the crypto market will successfully get out of this new FTT activity, because if the FTX trading company also struggles, we will fear a new episode of Terra Luna that may create a new turmoil in the market. .