FTT plunges 30% as hopes of FTX restart fade: Is the dream over?
Dreams of reviving the FTX exchange were dashed, triggering a massive sell-off of its native token, FTT. According to Kaiko on February 5, FTT, the now-defunct exchange’s utility-free currency, plunged more than 30% last week, wiping out much of its recent gains amid speculation of an FTX comeback. FTX will not resume operations The worrying decline follows reports that the bankrupt exchange once led by Sam Bankman-Fried is unlikely to resume operations. In particular, this news came despite the glimmering hopes of FTX customers. In a recent court hearing, exchange representatives claimed they expect full repayment from users. However, repayments will be based on the value of assets during the FTX bankruptcy period. Related Reading: Chainlink (LINK) Price Breaks Off Bullish Flagpole, Here Are The Next Targets: At the time of FTX’s bankruptcy in late 2022, cryptocurrency assets were in the final stages of a bear market and prices were at multi-month lows. Bitcoin, the world’s largest cryptocurrency asset, was trading below $20,000. After FTX collapsed, the price fell below $16,000 and then bounced back strongly. After a court hearing in late January, in a now-deleted YouTube video, FTX’s lawyer Andrew Dietderich said the exchange would not consider a relaunch because there were no buyers. For this reason, the exchange is considering allowing creditors to obtain approval from investors seeking repayment. Affected claimants will need to provide sufficient evidence that they held assets in FTX prior to its collapse, given the new terms and trajectory the exchange will take. These new details raise concerns for thousands (if not hundreds of thousands) of claimants who claim the actual value of their assets is at pre-accident levels. On average, Bitcoin and its highest coins were roughly two orders of magnitude higher than their November 2022 lows. FTT Freefall, Reversal to Rise in November For most of 2023, FTT prices have recovered steadily. To prove this, the price of FTT has risen by over 300% since November 2023. This encouraging surge has only been fueled by the potential for FTX 2.0 to launch and implement new management models. Related Read: Bitcoin Price Will Skyrocket to $280,000 Next Year: Hedge Fund Manager With that hope fading, FTT appears to be facing a harsh reality check. Since FTT served as an important cog in the FTX ecosystem when the exchange was operating normally, questions are being raised about its usefulness. At the time of writing on February 5th, FTT changes hands at around $1.7. If you look at the price chart, the downtrend is in control, completely reversing the advance in November 2023. As it stands, $0.95 remains a key support level. Featured image from iStock, chart from TradingView
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