Some investors are concerned that tensions between major cryptocurrency exchanges Binance and FTX could weigh on the digital asset market, which has already suffered price chaos this year.
According to Coinranking, Binance is the world’s largest cryptocurrency exchange by 24-hour trading volume, while FTX ranks third.
On Sunday, Binance founder Changpeng Zhao (often referred to as “CZ”) tweeted that the exchange will begin liquidating its remaining FTT token holdings Coin, the native token of FTX. its book. To limit market impact, the sale could take several months to complete, Zhao said.
According to a Bloomberg article, Binance holds about 23 million FTT tokens, worth more than $500 million at current prices, citing people familiar with the matter. According to CoinGecko, the total market capitalization of FTT is about $3 billion. According to Zhao, Binance received FTT tokens as part of its exit from FTX equity investment last year.
Zhao said the decision to liquidate FTT tokens was due to “recent revelations,” without elaborating on what he was referring to. A representative for Binance did not respond to a request for comment for this article. Last week, CoinDesk reported that a significant portion of the balance sheet held by Alameda Research, a crypto trading firm owned by FTX CEO Sam Bankman-Fried, is made up of FTT tokens.
In response, Alameda CEO Caroline Ellison tweeted that “recently circulating” information refers to “specific balance sheets… against our Part of a corporate entity”, which has more than $10 billion in assets not reflected in it. In reply to Zhao’s tweet, she also offered to buy FTT tokens from Binance for $22.
Bankman-Fried also responded on Twitter Monday. “A competitor trying to go after us with false rumors. FTX is fine. Assets are good,” he wrote. Bankman-Fried did not name a competitor. A representative for FTX declined to comment on the tweet.
Still, some analysts are concerned that tensions between the two cryptocurrency exchanges could spill over into the market, as the rather nascent industry this year has seen several major players Crash such as Blockchain Terra, crypto hedge fund Three Arrows, lender Celsius and digital asset broker Voyager. Bitcoin BTCUSD,
“The tension between Binance and FTX could raise questions about the broader crypto industry, including the financial health of Alameda Research and FTX,” said Kevin March, co-founder of Floating Point Group.
“Potential market pullback in the interim. Potential for short-term profit taking, plus FTX FUD (Fear, Uncertainty and Doubt) and upcoming U.S. CPI (Consumer price index) data, that could spook the market,” March said.
Bitcoin is down 1.7% over the past 24 hours to around $20,812, even though all three major stock indexes rose on Monday, with the Dow Jones Industrial Average
Meanwhile, analysts said that FTX could be affected by increased withdrawals. According to CryptoQuant, FTX’s stablecoin reserves hit a new yearly low on Monday and have fallen 93% over the past two weeks, indicating low buying pressure. According to CryptoQuant, FTX’s hourly ether withdrawals hit an all-time high early Monday. Reserves of FTT tokens across all exchanges also reached new all-time highs on Monday, implying increasing selling pressure on the token.
“A self-fulfilling prophecy may emerge and may have begun,” Michael Agboola, an analyst at digital asset brokerage GlobalBlock, wrote in a Monday note.
However, according to data from CoinGeko, FTT rose 0.1% in the past 24 hours to around $22.38 on Monday, down 12.7% in the past seven days.
