The recent surge in FTT’s price has significantly boosted the overall valuation of both FTX and Alameda Research. However, it is essential to note that most of these funds cannot be easily converted into cash due to their illiquid nature.
Gary Gensler Comments
In the last 24 hours, the price of FTT has increased by more than 200%. The United States Securities and Exchange Commission (SEC) Chairman Gary Gensler’s remarks regarding FTX’s future are primarily responsible for the surge.
The SEC Chair disclosed at DC Fintech Week that FTX might relaunch the platform provided its new owners run it legally. Following rumors that three businesses, including Tom Farley’s Bullish Exchange, are in the running to purchase FTX in preparation for a possible relaunch, Gensler made his claims.
As a result of the encouraging news surrounding FTX, FTT’s price increased significantly, raising the bankruptcy estate’s holdings by $427 million. There are 267 million FTT tokens in the wallets of FTX and Almada Research (worth around $761 million at current exchange rates).
FTT has increased by 28% over the last day to trade at $2.94 as of this writing. The revelation caused the token’s price to surge to about $3, and it currently has a $1 billion market cap.
The Catch to it!
Although the value of FTT has increased, FTX firms still own a sizable share of the token’s total supply, making the funds mainly illiquid. 76% of the 328.8 million tokens in circulation on the market are represented by the 267 million tokens it currently owns.
It is, therefore, no surprise that whale activity and retail interest in betting on the possibility of an FTX restart have driven the token’s spectacular rise in recent days. Despite the recent price spike, FTX firms have not deposited any of their holdings to an exchange for sale.
FTT tokens in their current model will probably not be sold to compensate customers impacted by the FTX collapse.
However, a potential reorganization of the token’s mechanisms by the bankruptcy estate would put it back into play, which many traders have been doing lately with their token purchases.
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