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The FTX (FTT) token has had an interesting few weeks. His fate remains uncertain, but as things stand, his prospects are not good. FTX Trading was the third-largest cryptocurrency exchange in the world, worth $32 billion, with a token that peaked in September at $85.
Unfortunately for everyone involved, the platform is now suffering from a severe liquidity crisis, with the value of its token dropping significantly. At the time of writing, its assets have been liquidated and the FTT token is trading below $2.
So what happened and are there ways other cryptos can avoid a similar fate?
What caused FTX to crash?
FTX trading was incredibly popular and loved by users and investors. Its native FTT offered high scalability and speed, and these aspects, combined with its reliability, made it particularly popular with enterprises.
After peaking in September 2021, the FTT token, like thousands of others, entered the bear market in November at the start of the crypto winter. In June of this year, it appeared to find a new baseline, trading between $20 and $30.
Things started to go downhill after a report from Coindesk on the 2n/a November revealed close ties between FTX Trading and a company founded by FTX CEO Sam Bankman-Fried called Alameda research. This sparked a public Twitter feud between Bankman-Fried and Binance CEO Changpeng Zhao.
The result was that Binance sold all of its FTT holdings, worth around $500 million. The sale sparked a colossal sell-off in the market, with $6 billion pulled out of FTX in less than three days.
After a phone call between the two CEOs and realization of the broader implications of the situation, Binance said it would buy FTX to protect investors and users. However, a few days later, after taking a look at FTX’s books, Binance backed down.
Since then, FTX CEO Bankman-Fried has been trying to find investors to keep the platform afloat and cover a liquidity shortfall of between $6 billion and $8 billion. While this is possible, most insiders and analysts are highly skeptical.
FTX trading has since filed for bankruptcy and had its assets liquidated. The FTX website currently has a somewhat disturbing message posted on its homepage:
“FTX is currently unable to process withdrawals. We strongly advise against depositing. TRX, BTT, JST, SUN and HT deposits are disabled.
Changpeng Zhao and other industry experts are warning of potential “cascading effects” for the crypto industry and Bankman-Fried is currently under investigation for mishandling client funds.
The wider industry may be affected, but some cryptos like BudBlockz will be immune
The future of FTX Trading remains uncertain but is undeniably bleak. The broader cryptocurrency market could feel the effects. For example, those in a similar industry will likely see a decrease in user confidence due to the realization of how quickly a once reliable, established and huge company like FTX can fail. Even Binance, which will benefit the most, will feel some effects.
However, some cryptos will remain unscathed as long as they offer totally different services or ensure sustainability through diversification and community. A great example of a platform that has combined all of these traits, is BudBlockz.
BudBlockz is an ecosystem and community that benefits and supports the growing cannabis industry. It has a decentralized e-commerce platform where users can use the native token, BLUNT, to buy, sell, and trade marijuana products.
Since weed is a weed with a history dating back three thousand years and is constantly growing, it will not suffer from a sudden loss of users. Additionally, the platform is still incredibly new with many new offerings being developed. In fact, the token is still in the pre-sale phase and is selling fast, with prices more than doubling, reflecting demand.
Additionally, BudBlockz will diversify its offerings and develop an interconnected ecosystem. For gamers, there will soon be the launch of a P2E gaming platform called BudBlockz Arcade where top players are rewarded with BLUNT.
There will also be the release of Ganja Guruz, a collection of 10,000 NFTs inspired by the 90s. Owned by one of these NFTs. To stay up to date with all things BudBlockz, join telegram group and follow BudBlockz on Twitter.
The BudBlockz token is available for purchase from the official webpage, https://budblockz.io