One thing is Crypto is never boring as there is always something going on behind the scenes. Luckily I stick to the projects I have researched and don't speculate outside of that. There is a storm brewing and not sure what to make of it yet it could have a few implications if it had to play out like some think it could. Almeida Research and the FTX exchange is the ones with a question mark dangling over their heads right now.
Why is Crypto always looking so dodgy and crooked as it is the so called big boys always messing up. Almeda Research for those of you that don't know is the Trading firm for Sam Bankman-Fried whilst his exchange he founded is FTX. FTX has grown in popularity over the last year or two and was looking like it was on the up.
Distribution of FTT is the problem
The biggest problem is Almeda's balance sheet as it is dominated by tokens that his own company printed being FTT. If he tried to off load them which he couldn't as the liquidity is just too small for that to happen as it would just crash. The 14.6 Billion in assets is way over inflated/valued and hence they need to keep pushing FTT hoping the price rises or they are in serious trouble. If we are in for more downturn which is always possible then this will look even worse than it does now.
When numbers don't add up there is normally a good reason for that and just can't see one here to be honest. Thankfully I have nothing tied up and don't use the FTX exchange as I would not be happy seeing these types of reports. Late last year we saw so many projects collapse due to one reckless Ponzi scheme with all the others leeching off them and I don't like the sound of what is happening here.
Alemeda or Bankman-Fried have control of the FTT token as 1% own 99% of the circulating supply. FTX is reportedly going to earn a figure of around $1 Billion this year ($400million last year) and they may need every cent of that to help balance their books. Imagine owning 99% of a token and knowing your company value is due to that valuation which could easily drop as you cannot sell in large numbers. Realistically how much could they sell the FTT token if push came to a shove if the needs were required to get their hands on cash quickly to save their company. I imagine less than half that market cap which makes this even more fragile and is seriously on shaky ground. Surely a little diversification should have taken place at some point or is everyone in Crypto such big gamblers going for a home run knowing they could strike out?
The way I read it if someone owned 99 million out of a supply of 100 million tokens the only way to increase value is to distribute those tokens. If you sold off 10 million the price would tank as by you holding the majority you are giving that token an unrealistic market value which you control. Almeda has a floored valuation as these coins can never be sold at those prices which is the house of cards..
I had to add this joke as I just couldn't resist as I found it funny and kind of reminds me of what Almeida's problem is.