Cryptocurrency giant FTX, which fell 30% overnight, rocked the two main cryptocurrencies, bitcoin and ether. 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 am French time, the FTT cryptocurrency, held by the FTX platform, fell by 30%, dropping below $ 16. At 9:45 am on Tuesday, the token rose slightly and is trading around $ 18.
The sharp drop in this token created an unprecedented upheaval in the cryptocurrency market overnight. The two main cryptocurrencies therefore fell by more than 5% each, bitcoin fell from $ 20,648 to $ 19,485 between 4:00 and 6:30 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 overcome their psychological thresholds, here they are again shaken. And this is not reassuring for investors, who do not have a short memory and remember the upheavals of this summer.
Alameda Research Insolvency Rumors
Recall that the fall of FTT is part of a context of alleged insolvency of Alameda Research, the trading platform of FTX. This rumor emerged when the specialized media Coindesk published information that the funds held by Alameda Research were mainly FTT, the token launched by the FTX platform.
Concretely, this means that the company is mainly based on a cryptocurrency, and that in the event of a sharp decline in the same or a feeling of distrust on the part of investors who decide to get rid of it, Alameda Research risks insolvency. 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 Earth ecosystem was mainly based on the stablecoin terra usdt. Recall that the fall of this stablecoin dragged the ecosystem into an unprecedented crypto-crash in May.
If Coindesk’s information was denied a few days later by the Alameda Research boss, it wasn’t enough for Binance boss Changpeng Zao. On Sunday, the latter announced that the platform intends to sell all of its FTT, as Binance acquired approximately $ 2.1 billion in BUSD and FTT following a transaction with FTX.
To limit the impact on the cryptocurrency market, CZ said Binance will sell its FTTs over 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 that transfer. After that, the price of the FTT crypto fell by more than 14%.
Towards a new episode of Terra Luna?
While analysts believe that the FTX and Binance platforms have gone to “war” over the resale of this token, CZ indicates that the sale of this asset is part of a desire for “risk management” to address the lessons “learned. “from the Terra Luna deal.
On Monday, FTX chief Sam Bankman-Fried wanted to reassure investors. “FTX is doing well, our resources are doing well,” said the latter. This probably didn’t reassure investors, who decided to get rid of this cryptocurrency, which dropped 30% overnight.
We already know that many bosses, from the Earth ecosystem to Celsius, have already tried to reassure investors when their company has been threatened with insolvency. It remains to be seen whether the cryptocurrency market will be able to get out of this new FTT affair, because if the FTX trading company should also be in trouble, we can fear a new episode of Terra Luna that could create a new upheaval on the market.