FTX price prediction: No hope of recovery, say pundits
After the value of the collapsed FTT token sank to a record low, price prediction websites are suggesting it will be nowhere near the value it reached before the fall of its parent, the FTX crypto exchange – even in nine years’ time.
FTT was as high as $52 in March 2022 and was still at $25.47 on 5 November 2022. However, after the rival Binance (BNB) exchange pulled out of a deal to take over FTX, saying it had failed due diligence tests, the resulting loss of confidence led to FTX declaring bankruptcy.
FTX owes billions of dollars to creditors and its token plunged to an all-time low of $0.8245 on 1 January 2023, before recovering to a little above the dollar later on in the month.
The founder of FTX, Sam Bankman-Fried, has been arrested on fraud charges, and predictor sites are now saying the token could fall still further, with not even the most optimistic predicting that FTT will reach $20 by 2030.
Bankman-Fried, known in crypto circles as SBF, appeared at a court in Nassau, capital of the Bahamas, on 13 December 2022 and was remanded in custody until 8 February 2023.
On 20 December, it was reported he had signed extradition papers that would see him taken to the United States, having previously demanded to see a copy of his federal indictment. He was remanded in the Bahamas Fox Hill prison and, on 22 December, was finally extradited to America.
Trial date set
Bankman-Fried has pleaded not guilty to eight charges, including fraud, conspiracy and money-laundering offences, which include making illegal political donations. His trial, which is expected to last for about four weeks, will begin on 2 October 2023. If the former billionaire is found guilty, he could face jail terms totalling 115 years.
American authorities are working on seizing Bankman-Fried’s stake in the share trading app Robinhood, believed to be worth about $465m.
Two former senior FTX employees, Caroline Ellison and Gary Wang, both pleaded guilty to fraud charges in New York on 22 December 2022.
On 11 January, a bankruptcy court heard that the exchange had recovered $5bn worth of assets seized by the Securities Commission of the Bahamas.
Previously, court documents revealed that Ryan Salame, the co-CEO of FTX’s Bahamian branch, FTX Digital, had told the country’s authorities that FTX customers’ money had been transferred to Bankman-Fried’s crypto hedge fund, Alameda Research.
According to papers obtained by Business Insider, FTX’s Bahamian offshoot, FTX Digital Markets, spent nearly $40m on hotels, food, entertainment and flights from January to September 2022.
On 6 January, US District Judge Lewis Kaplan authorised federal prosecutors to co-ordinate with a website set up to allow potential FTX victims to contact authorities.
The following day an American trustee, Andrew Vara, filed an objection to plans by FTX to sell LedgerX, its digital currency futures and clearing house, as well as units in Japan and Europe.
Vara called for an independent investigation before the sale of the units, arguing that the companies may have information related to FTX’s bankruptcy.
Meanwhile, four American Senators called for law firm Sullivan & Cromwell, who were set to serve as FTX's bankruptcy counsel, to be taken off the case.
A letter written by John Hickenlooper, Elizabeth Warren, Thom Tillis and Cynthia Lummisis said Sullivan & Cromwell was “simply not in a position to uncover the information needed to ensure confidence in any investigation or findings”.
Earlier it was reported that the former FTX lawyer Daniel Friedberg had cooperated with American prosecutors and would serve as a witness in Bankman-Fried’s trial. There were also reports that the US Securities and Exchange Commission (SEC) was looking at whether FTX’s investors had performed due diligence checks.
A class action lawsuit has been filed in California against Bankman-Fried, Ellison, Wang and former FTX official Nishad Singh, according to Mail Online.
‘Misappropriated customers’ deposits’
In December, US authorities said Bankman-Fried had engaged in a scheme to defraud FTX customers by misappropriating their deposits to pay for expenses and debts, and to make investments on behalf of Alameda.
The new FTX CEO John Ray told a panel of politicians in Washington before Christmas that it was “too early to tell” whether people would get their money back and that the company had carried out “old-fashioned embezzlement”.
Ray told the House Committee on Financial Services there had been poor record-keeping, with the Slack messaging app and QuickBooks financial software used to track invoices.
He said: “This is just taking money from customers and using it for your own purpose. Not sophisticated at all. Sophisticated, perhaps, in the way they are hiding something, frankly, right in front of their eyes. This is just plain old embezzlement. Old school, old school.”
With FTX, its American offshoot FTX.US and Alameda all applying for Chapter 11 bankruptcy in a US court, not to mention Bankman-Fried’s legal woes, the future of FTT is up in the air.
There have also been reports that Bankman-Fried was under investigation over claims that he manipulated the crypto market, which depegged the UST stablecoin and caused the collapse of the associated LUNA cryptocurrency in May last year .
FTT to USD
On 9 January, it was revealed that about 117 parties had expressed an interest in buying parts of the FTX empire.
There will be further hearings on 13 and 20 January.
Let’s now take a look at what FTT actually is and examine some of the FTX price predictions that were being made as of 12 January 2022.
FTX token explained
FTX described itself as a cryptocurrency exchange that allowed people to take part in both over-the-counter (OTC) and crypto futures trading. The platform aimed to provide a service with advanced features for professional traders while, it claimed, remaining intuitive enough for new users.
FTX operated a native token called FTT, based on the Ethereum (ETH) blockchain. This means that it is a token, not a coin, so references to such things as an “FTT coin price prediction”, or even an “FTX coin price prediction”, are wrong.
According to an FTX blog post: “If a user has a leveraged futures position on and markets move against their account enough that their net asset value is negative, then someone has to pay for that loss; and in crypto, you can’t repossess assets from the bankrupt account’s owner from outside the system, so you’re stuck with other users – the users who aren’t getting liquidated – footing the bill.”
The exchange sends “reasonable, volume-limited liquidation orders to close down positions that drop below maintenance margin (which starts at 4.5% and increases with position size)”. If there is a large liquidation and markets are moving down rapidly, liquidity providers take over and hedge their books on other exchanges to prevent a likely bankruptcy.
As the native token of the FTX exchange, FTT was the backbone of the ecosystem.
FTX burn programme
In addition, FTX operated a burn programme, in which 33% of fees generated on the FTX exchange went towards buying and subsequently burning tokens.
Because of regulatory policies in the United States, FTX has a separate American site, but this has also now filed for Chapter 11 bankruptcy.
The platform was founded by Bankman-Fried and, as of 12 January 2023, it was rated as the 232nd-largest crypto exchange by volume by CoinMarketCap. On 7 November, it was the second-largest.
Before its recent troubles, FTX made the headlines when it received a number of endorsements from celebrities including the American football legend Tom Brady and the TV comedian Larry David. Now a class action lawsuit has been filed in a Florida court against Bankman-Fried and some of FTX’s celebrity endorsers.
FTX token price history
While past performance should never be taken as an indicator of future results, knowing FTT’s price history may give us some useful context when it comes to both making and interpreting an FTX price prediction.
Based on the earliest available data from 2019, the FTT token price fell from $1.78 to a then-record low of $0.8313 on 7 September 2019. It subsequently climbed back and closed the year at $2.14.
The token price was moderately bullish throughout 2020, registering gains of 169% to end the year at $5.77.
In 2021, the value of FTT spiked from $5.82 on 1 January to $61.28 on 11 May, a more than tenfold increase. However, the broader cryptocurrency market then turned bearish, and FTT fell more than 62% to $22.79 on 26 June. Between June and September, the FTT price turned bullish again, reaching an all-time high of $85.02 on 9 September 2021. The price then fell to $37.46 on 14 December and it closed the year at $38.31.
At the beginning of 2022, the FTX token price action was slightly bullish, reaching a high of $46.73 on 20 January. However, the broader cryptocurrency market then crashed, and FTT fell to $33.48 on 22 January 2022, a drop of more than 28% within two days.
The bearishness continued and, on 15 June, FTT dropped to a 52-week low of $21.15. FTT’s price action then became somewhat stagnant, despite news that it had invested $300m in Mysten Labs, a Web 3.0 infrastructure business and architect of the Sui blockchain, in September 2022.
The proceeds of the investment were intended to be used to help speed up the Sui ecosystem’s adoption, and FTT was trading at around $23.60 as of 11 October 2022, despite Bankman-Fried announcing a raft of improvements to the exchange.
However, in November, while the news of Binance’s FTX liquidation saw the FTT price fall from $24.83 to $21.73, the announcement on 8 November that the takeover was off saw the price collapse even further, falling from $22.14 to $3.15 in just hours.
The bankruptcy announcement saw it close the day at $2.49. On 16 November, it fell to $1.54, and despite a couple of rises, by 29 November it was worth about $1.30.
Although FTT rallied to $1.91 on 9 December, it then fell back down and sank below the dollar on 19 December, when its low of $0.8805 was perilously close to its worst ever price. On 22 December, it rallied to $1.13, but then dropped, closing the year at $0.8427, a year-on-year loss of 97.8%.
Things got worse on 1 January when it sank to a record low of $0.8245 before recovering to $1.07 on 4 January, falling back to a low of $0.8789 on 8 January and then surging to $1.56 the following day before dropping back down to around $1.35 on 12 January 2023.
FTX price prediction round-up
Let us now take a look at some FTX price predictions that were being made as of 12 January 2023.
Do remember that price forecasts, especially for something as potentially volatile as cryptocurrency, often turn out to be wrong. Also, many long-term FTX crypto price predictions are made using an algorithm, which means they can change at a moment’s notice.
CoinCodex had a pessimistic short-term FTX price prediction for 2023, suggesting the token could be worth just under $1.02 by 17 January before falling further to $0.977091 by 12 February. Perhapsd surprisingly, though, the site’s technical analysis was neutral, with 15 indicators sending bullish signals and 13 making bearish ones.
DigitalCoinPrice made an FTT price prediction that said the average price for 2023 could be $2.68. It saw FTT then rising to $3.33 in 2024 and $4.19 in 2025. It made an FTX price prediction for 2030 of $13.81 before suggesting that it could trade at $25.64 in 2032.
CoinsKid had an FTT crypto price prediction that suggested the token could close 2023 at $2.09, before climbing to $3.48 by December 2024. The site made a bullish FTX price prediction for 2025 that saw it potentially start the year down to $3.13 and continue to drop throughout the year, potentially ending it at $2.64.
In contrast, Wallet Investor made an extremely bearish FTX token price prediction, suggesting FTT could collapse to a mere $0.145 by January 2024.
When considering an FTT token price prediction, it is important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin or token’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts and algorithm-based forecasters can and do get their predictions wrong.
If you are considering investing in cryptocurrency tokens, we recommend that you always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision.
Bear in mind that past performance is no guarantee of future returns and never trade with money that you cannot afford to lose.
Is FTX a good investment?
A lot will depend on whether the FTX exchange can recover from its bankruptcy and what happens now that Sam Bankman-Fried is to stand trial in the US, as well the performance of the crypto market as a whole.
Remember, you should always carry out thorough research before making an investment. Even high-market-cap cryptocurrencies have proved vulnerable to bear markets, so investors should be prepared to make losses. Never buy more than you can afford to lose.
Will FTX go up or down?
While some forecasting sites such as DigitalCoinPrice were upbeat as of 12 January 2023, others such as Wallet Investor were more pessimistic about the token’s future.
Remember, too, that price predictions often turn out to be wrong and that prices can go down as well as up. We also do not know what will happen to the FTX exchange now that it has declared bankruptcy. In volatile cryptocurrency markets, it is important to do your own research on a coin or token to determine if it is a good fit for your investment portfolio.
Whether FTT is a suitable investment for you depends on your risk tolerance and how much you intend to invest, among other factors. Keep in mind that past performance is no guarantee of future returns. Do not invest money that you cannot risk losing.
Should I invest in FTX?
Before you decide whether or not to invest in FTT, you will need to carry out thorough research, with regard not only to the FTT token but also to other exchange-related cryptos. Please keep in mind that the future of FTX is, at the time of writing (12 January 2023), highly uncertain.
Ultimately, this is a question that you will have to answer for yourself. Before doing so, you must conduct your own research. Never invest more money than you can afford to lose, because prices will go down as well as up.