If you watch the list of the top cryptocurrencies, you know very well that it changes quite frequently. This can lead to unexpected cryptocurrencies that you have never heard of reaching the top charts—and leaving you to wonder if they are worth an investment or not. And this week, one of the coins that had begun to draw notice is one called FTX Token.
FTX Token is a utility token on the FTX exchange much like the Binance Coin is the utility token on the Binance exchange. But considering that FTX has risen over 130% since July 2021, it’s time to take a deeper look into what this coin does and if it has value for investors.
So if you’ve noticed FTX Token yourself and are curious about investing, make sure you keep reading so that you can make a well-informed decision before putting your money on the line for a project that may not be worth it.
The Basics About FTX Token
FTX Token, abbreviated FTT is a utility token on the FTT cryptocurrency exchange. It is often used to help users reduce their trading fees and have access to premium services on the site. FTX isn’t a traditional exchange site like Binance however, as they additionally focus on the trading of cryptocurrency-based derivatives. But like Binance, they offer staking pools to maintain liquidation on their website therefore allowing trades to go through almost instantly.
One of the cool things about FTT is that it can be staked on the FTX platform for the chance to win NFT’s. This means that not only will stakers receive a small amount of FTT for staking, but they could also win cool digital artwork that they can auction off for millions in the future. One thing that many people aren’t so keen on when it comes to the FTX platform is that their liquidity pools are centralized. This means that unlike UniSwap or SushiSwap, there is a company monitoring the liquidity pool and controlling who puts money into it rather than a software system. Therefore the FTX platform is not considered to be decentralized.
Although it isn’t decentralized, many people enjoy using the FTX platform because they offer some security features that simply can’t be provided by a decentralized platform. When there is a company backing the liquidity pools, this means they have more control over who trades and they can deny trades that could possibly fail. This means there are less bankruptcies in the system that the liquidity pools have to absorb. All of the transactions on the FTX system are settled using a stablecoin wallet in order to make transactions go more smoothly.
Currently, because of US regulations, while FTX is available in the US, American users will find their ability to use the site is restricted to only a few services. This is unlikely to change any time soon due to bills that are currently on the Senate floor that may be passed to further regulate cryptocurrency. More on this later.
Who Invented FTX Token?
The FTX platform was invented Gary Wang and Sam Bankman-Fried in 2017, two men who were huge players in the cryptocurrency derivative world and were tired of how all the other platforms were run. They created the company, Alameda Research, which still backs and oversees the FTX platform today. Bankman-Fried is additionally the current CEO of the company.
Why Did FTX Surge in Price?
As previously mentioned, FTX has surged over 130% since July 2021. Why is this? Well, this price surge is mostly due to the company recently acquiring another US company, LedgerX. This acquisition should prove beneficial to the company—and hopefully to its American clients that currently can’t enjoy the full range of FTX capabilities. And because of this news, many investors rushed to purchase the token because they believe it will rise even further in value once American’s are able to use the platform to its full potential.
But besides just the acquisition, FTX also held a fundraising round, in which they raised over $900 million in funds. When combined with previous fundraising rounds and the coin’s ICO, this values the company at a whopping $18 billion—and many investors worldwide want in on the action. Another cool thing about FTX is that they have also made the pledge to go carbon neutral—something that is hard to do in the cryptocurrency world. To date, they have yet to actually do it, but hopefully its pledge means something and in the future they can achieve this goal. And because of this pledge, this involved many people who are against other cryptocurrencies for environmental reasons—thus driving up the price even more.
As for the NFT’s that are awarded to stakers, well these come from FTX’s partnership with Axie Infinity, another strategic business move that has helped to boost their image as well as convince people to stake the currency.
Wait…there’s more, Kevin O’Leary, a famous investor from the show Shark Tank, has also agreed to endorse the coin. This is huge, as getting seasoned investors in the cryptocurrency world can be a bit of a struggle, and clearly this one paid off, because people are eager to purchase a coin endorsed by a celebrity, even if they know nothing about it.
Should You Buy FTX Token?
FTT sure looks like a promising investment. But the truth is, although it has experienced a surge in price, it’s a bit too soon to decide on the investment potential of this coin. On one hand, it is a product that the cryptocurrency world needs, and they seem to have lots of great partnerships to help build their name. The problem? Well the space is already filled with many cryptocurrency derivative options, and this one is centralized—something which many traditional investors shy away from.
Therefore, the jury is still out on to if you should invest in FTX Token or not, as this cryptocurrency is simply too young to tell. But if you like risk, and believe in the product, there is a possibility that an investment in FTX Token could pay off.
Overall, remember that investing in cryptocurrency is risky, and just because a coin has a sudden price spike doesn’t mean that it isn’t too good to be true. So like any other investment you are considering making, be sure you thoroughly look into an investment in FTX Token before you put your hard-earned cash at risk.