FTX Token, the native cryptocurrency of the bankrupt crypto exchange FTX, recently experienced a significant price surge, climbing over 70% on Sept. 29 in lieu of impending bankruptcy distributions. The dramatic increase was a notable change from the token’s month-long period of trading around $1.40. This uptick saw the token momentarily reach a multi-month high of $2.70, according to CoinGecko data. It has since settled at around $2.10.
The sudden rise in FTX Token’s value was following social media rumours suggesting that FTX’s bankruptcy estate would begin dispersing repayment funds to creditors and customers on Sept. 30. However, the bankruptcy plan is still waiting court approval; a hearing is set for Oct. 7. If passed, creditors owed less than $50,000 will be paid out by the end of 2024, while larger claims are likely to be settled between Q1 and Q2 of 2025.
Originally launched in 2019, not long after the FTX exchange made its debut, the FTX token was once a promising asset. It offered several benefits to users, such as trading fee discounts for holders and could be used as collateral for futures positions on the exchange. The token reached an all-time high of nearly $80 in September 2021 but fell to approximately $2 after FTX filed bankruptcy in November 2022. A major contributing factor to the token’s free-fall was Binance, a leading crypto exchange, making a decision to offload its entire FTT holdings in a bid for “post-exit risk management.”
Despite the sell-off in 2022, data from blockchain explorer Etherscan shows that there are still around 30,600 FTX Token holders as of Sept. 30. The token retains a market cap of $330 million. In July 2024, the proposed FTX repayment plan recommended omitting FTT claims from the bankruptcy process, citing the “equity-like characteristics of FTT.”