The FTX token hit a low of $3.12 on Tuesday before rebounding significantly to around four dollars before falling back to about $5.48 at the time of writing. FTT has dropped roughly 93% from reaching an all-time high of $84 in September of last year.
Bitcoin, the biggest cryptocurrency by market value, is also struggling. According to CoinGecko statistics, BTC has dropped about 10% in the last day, reaching a new annual low of $17,579.
BTC has dropped 73% from its all-time high of little more than $69,000 in November 2021. BTC has already fallen below the $18,000 threshold earlier this year, with a low of $17,772 in June.
FTT’s price has plummeted after both Binance CEO Changpeng “CZ” Zhao and FTX CEO Sam Bankman-Fried stated on Tuesday that Binance will buy FTX due to a “severe liquidity shortage.”
CZ just said that he was selling all of Binance’s FTT holdings, valued at least $500 million.
“Due to new findings that have come to light,” CZ stated Sunday, “we have chosen to liquidate any remaining FTT on our books.”
“We will endeavor to do it in a manner that has the least effect on the market.” We anticipate this to take a few months to accomplish due to market circumstances and limited liquidity,” he said.
Despite CZ’s stated attempt to mitigate the effect of Binance’s FTT selloff, it is probable that this first statement influenced FTT price movement. CZ denies being responsible for any of FTX’s financial woes.
“There were even conspiracy theories that I somehow planned this entire affair,” he said of FTX’s recent problems on Twitter on Monday. “If you read this thread, you’d see that no one can pull this off.”
CZ subsequently explained why Binance was selling its FTT, referring to as as “post-exit risk management.”
He also said that he “won’t support those who secretly advocate against other industry participants.” A phrase like this might be a reference to Bankman-Fried, a crypto enthusiast in Washington D.C. Alameda Research of SBF contributed $6.2 million to Biden’s last campaign, while FTX.US contributed $5.2 million.
It’s worth mentioning that Binance and FTX’s US counterparts do not seem to be participating in the purchase agreement at this time, since Binance intends to acquire FTX’s international operations.
