Bitcoin dragged by the collapse of the FTT token

The fight between Binance and the FTT token is affecting the entire crypto market, including Bitcoin. Following recent rumors, Binance revealed that it will liquidate its entire stake in FTX’s token (FTT).

Bitcoin falls, FTT token follows

There is no positive sentiment among investors who have seen Bitcoin drop below $20k per unit in just a few days, and in the process of moving sideways, there are those who suffer dramatic declines. 

We are talking about the token of FTX (FTT), the popular exchange run by Sam Bankman Fried. Indeed, FTT has suffered a 19% drop in the recent period.

The cause of this is related to the intense sell-off, fueled by Binance CEO Changpeng Zhao‘s announcement to liquidate his entire stake in native token company FTX:

“The liquidation of our FTTs is just post-exit risk management learned from LUNA. We gave support before, but we don’t claim to make love after divorce. We are not against anyone. But we will not support those who lobby against other industry players behind their backs. Onward and upward.”

CZ explains what he learned after the fall of Luna Classic (LUNC) from Terra and its impact on market participants.

The FTT and Binance situation

According to the Cointelegraph newspaper, the decision of Binance’s CEO to liquidate the token is due to recent news of the budget unveiled by SBF’s Alameda Research.

Indeed, on Coindesk’s website, Alameda Research’s assets (of $14.6 billion) were recently revealed, of which $5.8 billion were solely native FTT tokens, the tokens of its own FTX platform. This is thought to be the reason for Binance’s radical decision. 

In an explanation, Alameda Research CEO Caroline Ellison stated that the budget shown does not reflect the full reality. She stresses that it covers only a “subset” of their business divisions and that there are high-value assets that are not on the balance sheet:

“The balance sheet highlights some of our most important long positions; obviously we have hedges that are not reported.

Given the tightening of credit in the cryptocurrency sector this year, we have already repaid most of our loans.”

Sam Bankman Fried also intervened, defending the CEO and saying that a huge amount of unfounded news is circulating on the web and especially on Twitter.

Meanwhile, the CEO of Binance still has not stated how many FTT he will sell, but he revealed on Twitter that he holds about 2.1 billion FTT. He will try to sell the tokens in a way that “minimizes the impact on the market,” so the sale will take several months. 

Interestingly, the effect has spread to the Solana crypto as well, despite the good news last week, probably because $1.2 billion of Solana tokens (SOL) are on Alameda’s balance sheets.