FTX Token (FTT) Breaks Record, Shoots for $100
FTX Token (FTT), the native token of a futures trading platform, has turned into one of the bullish bets for September. FTT recently broke an all-time high close to $70, and preserved most of the gains, hovering above $67.
The latest rally surpassed even the bravest predictions from the last few days, putting FTT in price discovery territory. The asset is also up to an all-time high around 0.001 BTC.
FTT is an alternative to the rising tide of DeFi platforms and tokens, including LUNA, SOL, MATIC. The mid-week recovery of the markets, with BTC near $50,000, is helping boost even the smaller projects. FTT stood out as one of the rare exchange tokens to move to a higher price range.
Added to this, the recent spike of Ethereum (ETH) above $3,700 is spreading throughout the token ecosystem. FTT extended the rallies of altcoins, which also lifts more prominent offerings like Cardano (ADA), Tezos (XTZ) and even MIOTA (IOTA). Altcoins also keep pushing down the BTC market cap dominance, which is now down to 42.1%, down from about 46% in the beginning of August.
Can FTX Double in Price
FTT traders have noticed a pattern of significant market selling in the past weeks. Recently, a large-scale wallet has been found, reportedly divesting its FTT holdings continuously. This whale-scale selling is viewed as the chief factor still holding FTT down.
FTT has a relatively low circulating supply of about 92M tokens, out of about 345M in total. An increased scarcity could push some of the trading pairs higher. Until recently, traders noted selling every time FTT was close to $50, which extended into a period of sideways movement for the token. The rapid expansion close to $70 was a sign the selling may have abated.
FTT has a mid-range liquidity score of about 681 points on the Binance trading pair. The FTT/USDT pair carries more than 40% of all trading activity, with the potential for highly concentrated trading to push FTT higher. More dramatic expectations envision FTT reaching the success of Solana (SOL) to trade above $100.
What Drives FTT
The FTT asset is the native token of the FTX Exchange, a derivative marketplace that boasts more than $20B in trades for a single 24-hour period. The exchange boasts of a team built up of former Wall Street quant analysts, with experts coming in from Jane Street, Optiver, Susquehanna, as well as Facebook, and Google.
On the FTX exchange, FTT has an additional, highly active trading pair with USDT, with more tna $350M in daily volumes. Overall trading for FTT is above $2B per day, getting close to the $3.6B per day for SOL.
FTT benefits from exchange activity, and may rise on expectations that native exchange tokens generally command higher valuations. For now, FTT can’t compete with Binance Coin (BNB), which has reached levels above $600 based on its involvement with multiple side projects and startups in addition to centralized trading.
While FTT is not a DeFi token, it has its own Binance Smart Chain version and as such can participate in various DeFi liquidity pairs, liquidity pools or collateralized lending. FTT is already building small liquidity pools on the Uniswap and SushiSwap exchanges.
FTX Exchange May Offer Derivatives for US Traders
Cryptocurrency derivative trading remains highly risky. US-based traders have been limited from some of the spot and derivative markets.
FTX Exchange aims to solve the limitations by buying a local fully licensed derivative exchange operator. The LedgerX acquisition announcement also turned into one of the major triggers for FTT price action in the past few days.
The new derivative offerings will limit leverage to 20X, following the trend of phasing out 100X leverage on Binance. The expansion to the US market will have the additional benefit of offering FTT to a new audience of buyers.
Currently, FTT is inaccessible except through decentralized exchanges like Uniswap, and is offered on platforms that bar US-based buyers.
How High can FTT Go
The short-term expectations for FTT suggest that a breakout to the current range may translate into an extended rally to $100.
However, FTT remains at a risk for organized selling to depress the price, as well as for overall volatility. FTT tokens are highly concentrated in a handful of top wallets. FTT has close to 13,000 wallets, with possibly a smaller number of holders.
FTT is also significantly decoupled from BTC prices. Most of the price discovery for FTT happens against USDT, followed by USD pairings and Binance USD (BUSD). More than 64% of all trades hinge on USDT pairings on various exchanges.
So far, the FTX platform has not mentioned any involvement with NFT collectibles. FTT thus remains a different class of tokens, removed from the DeFi and NFT hype.
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