FTT Crashes 30% Amidst Disappointing FTX Relaunch Prospects: Is the Dream Over?
The once-promising revival of FTX exchange has come to a screeching halt, resulting in a significant sell-off of its native token, FTT. Recent data from Kaiko reveals that FTT experienced a sharp decline of over 30% last week, effectively wiping out much of the gains it had garnered from speculation surrounding an FTX comeback.
Reports suggest that FTX is unlikely to resume operations, adding to the apprehension surrounding the token’s value. Interestingly, the exchange’s representatives had expressed optimism at a recent court hearing, stating their intention to fully repay users. However, these repayments would be based on the worth of assets held during FTX’s bankruptcy period.
It is important to note that when FTX went bankrupt at the end of 2022, the cryptocurrency market was in the final stages of a bear market, with prices plummeting to multi-month lows. Bitcoin, the largest crypto asset globally, was trading below $20,000 during this time. Following FTX’s collapse, prices dipped below $16,000 before experiencing a strong rebound.
A statement made by FTX lawyer Andrew Dietderich in a now-deleted YouTube video after a court hearing in late January reveals that the exchange will not be seeking a relaunch due to a lack of prospective buyers. Instead, the exchange plans to allow creditors to seek approvals from investors for repayments. However, this new approach raises concerns among claimants who argue that the current value of their assets should be based on pre-crash levels. On average, Bitcoin and other top cryptocurrencies were significantly higher than the November 2022 lows.
FTT had been experiencing a steady recovery in prices throughout 2023, with its value skyrocketing by over 300% since November. This surge was largely attributed to the anticipation of FTX 2.0 launching and introducing a new management model. However, with these hopes diminishing, FTT is now facing a sobering reality check. Questions about its utility are arising, as FTT played a vital role in the functioning of the FTX ecosystem before the exchange’s downfall.
As of February 5th, FTT is trading around $1.7, with bears firmly in control and completely reversing the gains seen in November 2023. The crucial support level of $0.95 remains a key concern.
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