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FTX’s FTT Token Hits All-Time High Following LedgerX Acquisition

The market seems to believe Sam Bankman-Fried’s crypto empire has gotten more powerful.

Sep 1, 2021 at 8:56 p.m. UTC
Updated Sep 2, 2021 at 4:09 p.m. UTC

FTX.US’s Tuesday acquisition of crypto derivatives platform LedgerX has driven FTT, FTX’s exchange token, to fresh all-time highs.

FTT hit $66.08 after markets opened in the U.S. on Wednesday, according to data from Messari. With a market capitalization of $6.19 billion, FTT is the second-largest centralized exchange token, only behind Binance’s BNB.

The pending acquisition of LedgerX positions FTX.US to offer crypto futures, swaps, puts and calls to retail traders. It’s the latest sign of the growing ambitions of Sam Bankman-Fried’s Hong Kong-based crypto empire.

“There’s probably some momentum [because] we’re making quite a few strategic acquisitions at the moment,” Jonathan Cheesman, head of over-the-counter and institutional sales at FTX, told CoinDesk.

LedgerX has several key licenses allowing it to offer bitcoin and ether derivatives in the U.S., making it easier and faster for FTX to enter the U.S. market with such products. Founded in 2017, FTX is known globally for its crypto derivatives.

Analysts previously told CoinDesk that FTX’s acquisition of Blockfolio in May 2020 made FTX “very retail-friendly.” Blockfolio, which was rebranded to “FTX” in July, is a portfolio tracking app primarily serving a retail customer base.

Cheesman also said FTX has benefited from rising concerns around some of its competitors.

Without mentioning the specific exchanges, Cheesman said one of the exchanges has been “under the spotlight” over regulatory concerns. (We’ll name it for him: Binance.)

Meanwhile, Chinese crypto exchanges including Huobi and OKEx have tightened their derivatives rules amid China’s renewed efforts to rein in crypto trading.

It all points to why FTT may be surging: Traders see such tokens as a way to bet on an exchange’s growth.

“We’ve kind of had a bit of gain from each,” Cheesman said.

Rising fortunes

According to data from the Coinbase-owned Skew, FTX is the No. 3 crypto exchange by bitcoin futures open interest, just behind Binance and Bybit.

On the bitcoin spot market, FTX has also gained market share against its more well-known and established competitors such as Binance and Coinbase.

Data from blockchain data firm Kaiko shows that since November 2020, on a percentage basis, FTX’s bitcoin spot volume versus the total volume has surged from 2.5% to 15.5%, an indication that the exchange known for its derivatives products has also attracted many traders to its spot market.

“FTX Global currently does not service U.S. traders but the exchange’s U.S. affiliate is aggressively ramping up marketing efforts, partnerships and regulatory relationships, which could pose a strong competitive threat to Coinbase,” Kaiko wrote in its weekly report dated Aug. 30.

FTX raised the largest funding round in crypto history in July with a $900 million Series B round.

The exchange continues to pour money into getting its name out there, spending $135 million on naming rights to the Miami Heat home arena, slapping its brand on a popular esports team for $210 million and even paying to adorn the umpires of Major League Baseball with the FTX logo.

“Binance still reigns supreme in global spot markets,” Kaiko wrote in its report, “but as we know by now in the rapidly shifting crypto industry, exchange dominance is tenuous.”

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Muyao is a reporter on the markets team. She is based in Brooklyn, New York. She holds less than one BTC.

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