How does the Collapse of FTX Affects FTT and SOL

Stay Tuned with MEXC Global (11/09/2022)

Binance announced their desire to buy FTX yesterday in order to shield their users from the liquidity issue. What is this, though? There are presently reports asserting that Binance may terminate the deal after examining the FTX's order book and other financial data. According to a poll taken on CoinDesk's Twitter account, 42.5% of participants think CEO CZ is unlikely to accept the offer. 33.9% of voters said that Binance will definitely buy FTX and defend its users. What do you think? Well later on Wednesday Binance confirmed that they will walk away from the FTX deal. What effect does that have on SOL's price hypothetically? Now let's discuss the FTT price, which is your most urgent issue.

 
Will Binance follow through on the FTX deal? (Source: CoinDesk Twitter)

FTT costs $2.986 as of this writing, approximately 46% cheaper than it did yesterday. FTT's price dropped by 75.14% yesterday. FTT value decreased by 88.86% from a month before. This did not just affect retail investors; a number of institutions also found themselves in a tricky situation.
FTT 1H Price (Source: TradingView)

According to a report by CoinDesk, there is a list of companies that are exposed to the dangers of this battle between the two major cryptocurrency exchanges. The list includes coins like Gemini, Wintermute, Multicoin, and others. Gemini, a cryptocurrency exchange, claimed in a tweet from yesterday that they had "hedged and sold collateral leading in a total loss of around $7M across all counterparties, including Alameda," adding that this loss included Alameda. Gemini further emphasized that rather than relying on loans, its relationship with FTX is one of trading. In order to keep their users' faith in this unstable market, they seem to be making an effort to set themselves apart from FTX.

How does Solana (SOL) be affected?

The Solana token, abbreviated SOL, suffers as a result of this unclear deal. Yesterday's price decline for SOL was 19.56%. The disposal is still going on. As of this writing, SOL's price has dropped another 54.13% today, to a low of $9.67. Why then do these negative impacts seem so severe? In accordance with a Fortune Crypto article, FTX and its CEO Bankman-Fried have long supported Solana. It is significant to note that SOL is the second-largest shareholder in Fried's company Alameda, which engages in bankman trading. It represents around 10% of Solana's market value.

The air is suddenly filled with a palpable apprehension. This is due to the possibility that Binance, if it were to acquire a sizeable amount of SOL, may prioritize its own coin, BNB, and liquidate its holdings of SOL as a result, further depressing the price. Because of its close ties to Bankman-Fried, SOL is clearly hurting, and the cryptocurrency community is still waiting for Binance to make an official announcement about the transaction.

Final Reflections

I won't lie, CZ made a cunning maneuver that essentially removed one of its primary competitors from the picture. Another quality I admire is FTX's founder Bankman-willingness Fried's to sell its great "workpiece" in order to save its users. I'm not sure how this crypto-drama will end at this point. I can only hope that individual traders would exercise caution and that exchanges will protect their customers.