FTX (FTT) is struggling for survival after Binance (BNB) dropped an acquisition bid.
For example, FTX chief executive Sam Bankman-Fried is struggling to raise money to keep FTX afloat, The Wall Street Journal speculates. FTX could collapse without a buyer, The Washington Post speculates.
Binance CEO Changpeng Zhao backed out of the FTX deal because “mishandled customer funds” and media speculation about federal regulatory action against FTX. The Post claims FTX could not cover its liabilities because of a $6 billion shortfall in funds.
The Post blames Zhao for FTX’s liquidity crisis. The CEO tweeted that Binance was selling off its FTX (FTT) tokens on 7 November 2022. Hence, FTX is either an opportunity for speculators or an unfolding catastrophe.
On 10 November 2022, FTX announced that trading could be halted on FTX US in a few days. However, they did not say why they will halt trading or if trading will actually halt.
What is FTX?
FTX (FTT) is trying to build exchanges that serve as one-stop trading centers for digital assets.
FTX offers OTC-Trading and Derivatives
Interestingly, FTX US operates an Over-the-Counter (OTC) portal where consumers can buy cryptocurrencies and other digital assets from FTX. To elaborate, the term OTC refers to investments not sold through centralized exchanges, such as the New York Stock Exchange (NYSE).
FTX also offers trading in derivatives, including crypto options and futures. They claim FTX accepts derivative contracts as small as 0.01 Bitcoin (BTC) and 0.10 Ethereum (ETH). They offer 24-hour-a-day trading and BitGo and BitGO Trust Custody. Importantly, they claim FTX’s derivatives are federally licensed and regulated. FTX offers Bitcoin and Ethereum derivatives.
FTX acquired LedgerX a Commodity Futures Trading Commission (CFTC) cryptocurrency and futures clearing house in August 2022. FTX supplies Form 1099-B, the IRS document for reporting derivatives income to traders through Lukka and HIS Markit. This allows FTX derivatives investors to comply with US federal tax laws.
FTX Whitelabel offers crypto-as-a-service (CAAS) platform that businesses build crypto payments platforms.
The CAAS platforms offer businesses deep liqudity for crypto payments, a scalable full-stack exchange suite that supports 24/7 services for business of all sizes. They claim the FTX Whitelable complies with Know Your Customer (KYC) and Anti-Money Laundering (AML) processes. AML and KYC allow businesses and platforms to comply with laws and regulations by detecting and deterring illegal activity.
They claim the CAAS platform allows companies to accept and make payments from cryptocurrency accounts in over 10 fiat currencies. They also claim the CAAS platform can convert over 100 tokens and cryptocurrencies. Onboard users with seamless KYC and AML solutions.
Other FTX Whitelabel services include:
- Real-time fraud monitoring with Know Your Transaction (KYT) technology.
- Fully customizable exchanges.
- High-security custodial wallets and hot and cold wallet management systems.
- The ability to offer customers crypto rewards as they spend money.
- Round-ups that automatically convert spare change into crypto.
- The ability to build cross-chain NFT marketplaces that mint, drop, and trade NFTs on Ethereum and Solana blockchains.
- The ability to offer customers automatic recurring purchases of digital assets.
- The ability to offer crypto staking rewards for certain tokens and jurisdictions.
The FTX Token (FTT)
They call the FTX Token (FTT) the backbone of the FTX ecosystem. FTX estimates FTT had a Circulating Supply of 248.480 million FTT, a Market Cap of $976.277 million, and Total Supply of 328.85 million FTT on 10 November 2022.
They claimed to have burned 21.105 million FTT worth $39.340 million FTT on 9 November 2022. They plan a pending burn of 3.033 million FTT worth $11.915 million on 10 November 2022. Users can buy, hold, stake, and burn FTT on the FTX exchange.
FTX US offers trading and swaps in Ethereum (ETH), Bitcoin (BTC), Solana (SOL), Matic (MATIC), Tether (USDT), Dogecoin (DOGE), and Bitcoin Cash (BCH). They offer pairs trading in many of those cryptocurrencies and US Dollars, for example, Solana/USD. FTX US had a $134.332 million 24-Hour Market Volume, and a $6.651 billion 30-Day Market Volume on 10 November 2022.
What Value does the FTX Token (FTT) have?
There is a strong market interest in FTX despite its troubles. The FTX Token (FTT) was CoinMarketCap’smost trending cryptocurrency on 10 November 2022. Plus, the FTX Token was CoinMarketCap’s 70th ranked cryptocurrency on 10 November 2022.
CoinMarketCap gave the FTX Token a $3.86 Coin Price, a $513.191 million Market Cap, a $1.351 billion Fully Diluted Market Cap, a 24-Hour Market Volume of $1.044 billion, a Centralized Exchange (CEX) Volume of $1.035 billion, and a Decentralized Exchange Volume of $9.630 million on 10 November 2022. They base those numbers on a Circulating Supply of 133.026 million FTT, a Maximum Supply of 352.170 million FTT, and a Total Supply of 328.895 million FTT.
If you are seeking a digital asset that could profit from the growth in cryptocurrency trading, I think FTX is worth a look. The opportunity to make money from those markets is there.
What Value Does the Cryptocurrency Market Offer?
For instance, CoinMarketCap estimated the value of the Global Crypto Market a $895.25 billion on 10 November 2022. Similarly, CoinMarketCap estimates the Global Crypto 24-Hour Market Volume at $165.58 billion on 10 November 2022.
Interestingly, CoingMarketCap estimated stablecoins comprised 96.7% of the 24-Hour Market Volume, or $160.11 billion, on 11 November 2022. Decentralized Finance (DeFi) accounted for just 4.82% of the 24-Hour Global Crypto Market Volume or $7.97 billion on 10 November 2022.
However, FTX faces enormous competition. For example, giant banks such as America’s BNY Mellon (BK) and cryptocurrency operators such as Binance (BNB) are now major players in the digital asset markets. I think companies such as FTX will have a tough time surviving with such competition.
Speculators need to examine FTX because its troubles show how terrible publicity can sink a digital asset fast. Additionally, FTX shows the deep problems that exist behind the scenes at supposedly healthy decentralized finance companies. I predict other cryptocurrency exchanges and digital assets will collapse because the business press loves negative publicity about crypto.