FTX Token (FTT), the native cryptocurrency of the collapsed FTX crypto exchange, is recording significant gains in 2023 despite the troubles surrounding the trading platform.
In particular, FTT has undergone an unexpected surge in value, rising over 120% since the start of the year, according to data shared with Finbold by Kaiko on January 23.
Despite the asset’s association with the bankrupt exchange, FTT has recently experienced a sustained mini-bull run amid uncertainty over lingering risks.
The data indicates that the FTT rally comes despite the token’s active markets plunging significantly from 28 to six. Currently, FTT markets include Binance, Huobi, Coinex, Kucoin, and Poloniex.
Although crypto exchange Binance was at the center of allegations of contributing to the collapse of FTX following the decision to liquidate its FTT holdings, the platform accounts for most of the token’s trading activity.
Drivers of FTT rally
At the same time, FTT trading volume remains significantly low, with data pointing out that it could be a trigger for the 2023 gains. In this case, lack of liquidity has partly made it possible for FTT to surge, with opportunistic buyers taking advantage of investors attempting to offload the asset. Additionally, the token is witnessing an almost balanced scenario regarding large buy and sell trades.
Notably, the sustainability of FTT remains uncertain, even as the case against FTX founder Sam Bankman-Fried continues. It’s worth noting that the gains in FTT have followed a similar pattern as native cryptocurrencies of other collapsed projects.
For instance, Terra Classic (LUNC), the old chain of the now-collapsed Terra (LUNA) ecosystem, has gained recorded phases of price breakouts as the community attempts to regain previous highs.
In general, such assets have rallied despite a lack of a clear roadmap and transparent tokenomics. In some cases, communities hope tokens like FTT can emulate meme coins like Shiba Inu (SHIB) by leveraging initiatives such as short squeezes.
By press time, FTT was trading at $2.13 with daily losses of about 3%.
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