The FTX token price has plummeted to new lows throughout the past days, and as you may already know, the FTX Crypto Exchange is not faring all too well right now. This will come as absolutely no surprise once we have told you what caused this ordeal – it would be near impossible for any crypto exchange to go through what FTX has gone through and come out unscathed.
In this article, we will be taking a look at the various causes behind the collapse of the FTX token, as well as discussing what we can expect to see from the industry in the future.
A War Between Binance & and The FTX Crypto Exchange
In case you were not aware; there has recently been a huge development within the investing sector whereby it was found out that the FTX Crypto Exchange was connected to the Alameda trading firm, and as you would expect, this news has not sat well with most investors.
The fact that a popular crypto exchange is working in unison with a trading firm could suggest that market manipulation may have occurred at one point or another, and this was the catalyst for FTXs huge drop.
Bankman-Fried (the owner of both the FTX crypto exchange as well as the Alameda trading firm) disputed these claims in spite of a evidence folder that spanned a mile-high, and this only went to further exacerbate the concerns surrounding FTX.
In response to this news, Binance (another popular crypto platform) announced that it was going to be liquidating all of its shares in the FTX platform. Not only was this a huge blow to FTX all on its own, but it also caused investors from around the world to liquidate their holdings too, and this is exactly what has led to the near collapse of FTX.
Scandals akin to this size can be incredibly hard to recover from, and in truth, the only way that Bankman-Fried could redeem himself as well as his company is through transparency.
A full briefing regarding what he did with Alameda as well as whether or not any market manipulation did occur is looking as if it is Bankman’s only way out, and if this doesn’t come to fruition, then the future of FTX could be put in jeopardy.
The Current State Of The World Makes Investing Less & Less Feasible
On top of the huge scandal that FTX has recently been involved in, it’s also worth noting that the markets were already incredibly turbulent before this development was brought to light.
Investors were already extremely cautious about the current markets, and when you stack on a huge scandal on top of this, this just becomes a recipe for failure.
Don’t get us wrong; it is highly likely that FTX’s scandal would have caused them to experience substantial losses either way. However, there is no doubt that the current investing landscape provides the worst conditions for such a development to come out in, and this may be the reason why FTX has plummeted to such lows.
In a world where investors have to choose between keeping their heating on or investing in the newest token, it just isn’t worth the risk to put oneself in a situation that is almost guaranteed to fail, and this as well as a plethora of other reasons is what has caused FTX to crash.
When Will Things Return To Normal?
The question of when will crypto return to normal has been thrown around for a while now, and when you throw the whole FTX scandal on top of the pile too, then a light at the end of the tunnel just becomes all the more desirable.
Truth be told; no one can know for sure when/if FTX will recover. Scandals of this nature can be incredibly difficult to return from, and there is a slight chance that the FTX might disappear as we know it.
As for crypto as a whole, this is where things begin to look a little more promising. Experts predict that crypto will begin to recover in early to mid 2023, and while this might just be pure speculation, this is quite simply what all of the evidence is pointing to right now. This nightmare will be over before you know it.
We hope we have been able to give you a better insight into how and why the FTX token has slumped. The war between Binance and FTX was undoubtedly the catalyst that flung FTX into chaos, and when you factor in the fact that the markets were already struggling in the first place, it just becomes all the more obvious as to why the FTX token has dropped dramatically.
While FTX is likely going to make a recovery way down the line, it’s fair to say that it is going to be in the red for quite a while, and we might not ever see it reach the heights that it could have reached were it not for this catastrophe.
