how to short ftt: A crypto mystery: Why did no one short FTX?

how to short ftt

The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in. Earlier this week, as the week’s events began to unfold, FTT’s price experienced a stark fall. After starting the month around the $25 mark, FTT plummeted to a low of $2.06 on 9 November. However, FTX announced it was disabling the withdrawal function as the exchange starts its bankruptcy procedure. Even if you don’t plan on using the FTX exchange, FTT could be a good investment. Terra’s LUNA token (now known as LUNC) crashed in May, destroying billions of dollars in investor wealth.

The exchange token has faced great sell pressure in recent days, which followed news that FTX customers are no longer able to withdraw funds. As with all quanto contracts, the FTTUSD product has a fixed Bitcoin multiplier, regardless of the FTT/USD price. This allows traders to long or short the FTT/USD exchange rate without ever touching FTT or USD. Now you know how to buy FTX token (FTT) you should also know how to trade or sell your FTT in case of further severe price movements in either direction.

Purchasing FTT is a bit more complicated for users in regions that aren’t supported by Binance and FTX. You will need to fund an exchange account to buy Ethereum before swapping it for FTT. Send your Ethereum to the software wallet, go to Uniswap, enter in FTT in the bottom box and complete the transaction with your wallet. The application has a myriad of useful features beyond sending and receiving cryptos, including a place to store your non-fungible tokens (NFTs), a crypto-to-crypto trade tab and even a dedicated DeFi browser. FTX Token launched on May 8, 2019, and it has a total supply of about 345.2 million tokens.

  • The FTX team has been masterful at attracting funding, breaking records on July 21 with a $900 million Series B investment round.
  • A hedge fund called Galois Capital was among the few that smelled something rotten at Terra, and took a short position—betting that the price of Terra’s twin cryptocurrencies would fall.
  • It is 1 of the largest cryptocurrency exchanges in the world in terms of volume, despite its youth.
  • If you choose to use Uniswap to get your FTX tokens, you’ll need some Ethereum.
  • He is also the founder and CEO of Alameda Research, a quantitative trading company that handles billions of dollars worth of cryptocurrencies.
  • You can speculate on its price, earn SRM airdrops, get a discount on fees and more.

During a brief period, withdrawals were even halted by the bankrupt exchange. Traders can post margin in XBT, and earn or lose in XBT as the FTT/USD rate changes. This quanto risk premium may be one of the factors that results in the FTTUSD swap trading at a premium/discount to the FTTUSD spot price. Interacting with DeFi applications is made simple with software wallets, and Coinbase Wallet is a contender for the best.

FTTUSDT Linear Contract Specs

The FTX exchange itself is a leading platform for spot, over-the-counter (OTC), futures and prediction market trading. It is 1 of the largest cryptocurrency exchanges in the world in terms of volume, despite its youth. It offers hundreds of different tokens, and its mission is to fix the abundance of flaws that most leveraged trading platforms suffer from.

how to short ftt

Alex Kruger, a popular crypto analyst on Twitter, told CoinDesk that exhausted sellers and thin liquidity fueled a relief rally for smaller tokens. ZIL, the Zilliqa blockchain project’s native token, increased 37%, while the native token of the Aptos blockchain, APT, known for its rocky launch and venture capital backing, gained 30%. Since then, withdrawals have been reduced to a drastically lower pace as FTX faced liquidity troubles.

Any views expressed in or on BitMEX Research reports are the personal views of the authors. HDR (or any affiliated entity) has not been involved in producing these reports and the views contained in these reports may differ from the views or opinions of HDR (or any affiliated entity). The information and data herein have been obtained from sources we believe to be reliable. Such information has not been verified and we make no representation or warranty as to its accuracy, completeness or correctness. Any opinions or estimates herein reflect the judgment of the authors of the report at the date of this communication and are subject to change at any time without notice.

U.S Based Crypto Exchanges

Another challenge for retail investors who wish to place a crypto short is access. Crypto prime brokerages typically cater to large investors, making them inaccessible to many—unlike equities platforms such as Fidelity or Schwab, which let retail investors take out short positions. While there are a handful of crypto prime brokerages, such as Genesis, that can arrange short-selling bets, there are no large, registered financial outlets like J.P. Morgan in the space—and that poses a unique set of risks for anyone in the business of managing someone else’s money, Drose says. When the market makes a drastic move, traders on the other end of massive liquidations on an exchange with inadequate protections could be forced to pay for the losses of other users.

how to short ftt

The funding rate, or the cost of holding bullish long positions or bearish short positions, has dropped sharply to an annualized -36%, per data provided by Matrixport Technologies. A negative funding rate implies shorts or bears have the upper hand and are willing to pay funding to longs to keep their positions open. One of the most difficult issues with crypto exchanges is the lack of transparency, as the majority of them allow traders to trade on I-owe-you (IOU) balances, saving onchain costs. They have been observed pooling client deposits, thereby creating a honeypot that hackers frequently target. Furthermore, they frequently rehypothecate client funds, putting client deposits at risk. The ftx token (FTT) has plummeted in price during the past week as the cryptocurrency exchange has been thrust into crisis mode during a liquidity crunch, which eventually led to it filing for Chapter 11 bankruptcy.

There’s A Hidden Win In FTT, Binance, Bitcoin, Ethereum, Dogecoin, And Solana Chaos – Crypto Just Got Safer

Three Arrows Capital, Celsius
, and Voyager Digital all went bankrupt this year. With the ongoing collapse of FTX, the third largest crypto exchange, it is clear that something is wrong with exchanges and that the space requires fundamental change to restore investor confidence and security. The events surrounding the FTX exchange this week triggered panic selling in the markets, resulting in new lows in major crypto assets. Bitcoin
fell to a low of $16,890, the lowest level since November 2020. FTT, the native token of the FTX exchange, crashed 90% in what appears to be a panic selling and a path similar to Terra
Luna’s crash in May.

This resulted in a bank run on FTX, panic selling of FTT tokens, wild short-selling speculation trades, and, ultimately, the announcement that CZ would acquire FTX. At the time of writing, the prevailing news is that Binance may withdraw from the deal after reviewing FTX’s books, and that US financial markets regulators are investigating whether FTX properly handled client deposits. Most use cases of FTT involve the exchange, but you don’t need to use it to own and benefit from the token. About ⅓ of all fees generated by the exchange are used to purchase FTT, which are then burned (removed from circulation forever).

Brief History of FTX Token

While this does not solve the honeypot problem, it is a step in the right direction, in my opinion. They assist traders in on-ramping and off-ramping funds from fiat to cryptocurrency and vice versa. They also provide liquidity, which allows for the smooth exchange of cryptocurrencies with other cryptocurrencies. The price action came after BTC, the largest cryptocurrency by market capitalization, retook the $17,000 price level after trading in a range for three weeks, improving sentiment in the broad crypto markets.

how to short ftt

Serum (SRM), the native token of the Solana-based decentralized exchange, surged 28% on the day. Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. The token was down 4% on the day at $22 at press time, according to CoinDesk data. It’s now stuck with half its capital trapped on the platform of bankrupt FTX.

Rumors of insolvency caused a bank run, causing a massive crash in FTT’s price. This kind of volatility can be incredibly profitable but its ludicrously risky. If you choose the wrong direction (especially if you’re using margin) you could lose a lot of money really fast. Only trade with money you can lose trading volatile tokens like FTT because there is a high chance you will lose much of your investment.

Both wallets have the same certified secure chip that randomly generates and encrypts the private key of your wallet. The private key is what lets you access and transact with your wallet, and it never leaves your Ledger device. Right now Pionex is really the only major exchange available in the U.S. that supports FTT. Pionex is a great exchange with all kinds of extremely useful functionality including an incredible variety of supported cryptos, automated trading and much more. After weeks of stagnation, the crypto market roared back to life on Monday as coins with smaller market capitalizations outperformed larger ones like Bitcoin BTC/USD and Ethereum ETH/USD.

The FTX team has been masterful at attracting funding, breaking records on July 21 with a $900 million Series B investment round. More than 60 large investors contributed to the Series B, including Paradigm. Recently even Tom Brady, the legendary National Football League quarterback, made a deal with FTX for equity in the platform and an unspecified amount of cryptocurrency to be a brand ambassador. After days of muted trading and crushed volatility, the crypto market came back swinging on Monday as cryptocurrencies with smaller market capitalizations rallied, outperforming the blue chips bitcoin (BTC) and ether (ETH). According to crypto exchange Phemex, Alameda owns over 50% of the FTT token, and a continued slide in the cryptocurrency’s price could have market-wide ramifications. While Bitcoin addresses the age-old issue of money, I believe cryptocurrencies have spurred more innovation in the form of global companies with instant global reach.

The sudden surge caught traders off-guard betting on cryptocurrency prices to fall. In the past 24 hours, traders liquidated some $245 million of short positions, according to Coinglass data. Monday’s was the largest daily short liquidation since Nov. 10, when crypto exchange FTX’s agony before its ultimate demise stirred up price volatility in the crypto market.

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