In this newsletter, we are profiling FTX Token [FTT]. In previous newsletters, we have profiled Bitcoin, Cardano, Solana, Uniswap, DOGE and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
FTT is like many other crypto exchange tokens, and there are several of them, except that FTX has a massive war chest of money to use on marketing. Similar to what crypto.com is doing, we see FTX show up in sports all around the world.
FTX is a cryptocurrency derivatives exchange, and its token is FTT. It was launched in 2019 by Alameda Research, an established trading firm and leading liquidity provider. The founders are Sam Bankman-Fried and Gary Wang.
FTT is mainly an ERC20 token on the Ethereum chain but has wrapped tokens available on the Binance Smart Chain and Solana (via Serum). It has a maximum supply of 350 million. They have a burning mechanism that will continue until eventually half of the total supply is burned. FTT is used for paying exchange fees and staking. You can read more about staking FTT at https://ftx.com/staking, which shows all tier levels and associated benefits. The more FTT you hold, the better discount you get on FTX exchange fees. Staking FTT has the unique advantage of also being able to win digital artwork in the form of NFTs from their marketplace. You can also possibly win tickets for their various Initial Exchange Offerings. Unstaking has a 14-day unlock period.
Whereas most exchanges deal with spot trading, the main focus is on derivatives such as Futures trading, where you bet on the future price action of an asset. Spot trading is still available as an option on FTX as well. All derivatives on the exchange are settled via stablecoin and only require a universal margin wallet. Other features of the exchange include clawback prevention, a collateral pool, and leverage tokens.
One of the drawbacks of FTX, but also a benefit depending on your viewpoint, is that their liquidity pools are centralized. This means that they are monitored and controlled by the company rather than software, as is the case with exchanges like UniSwap or SushiSwap. As long as you trust FTX, this leads to more stability and safety.
Earlier this year, FTX bought out Blockfolio, the popular crypto portfolio tracking and trading platform. FTX also has some big sponsorships with sports organizations, like Major League Baseball and the Miami Heat basketball team, whose home court is now called the FTX Arena.
FTX token started out much as Binance token did, and it will be interesting to see how they develop it. Will they eventually get their own mainnet and add more utility and smart contracts? These are still the early days to get in on a vast and promising exchange.
FTT against BTC on the weekly chart going back to July 2019 we see that the lows of 10,600 satoshi was early part of the token release. In December 2020 it dipped down to 18,500 before the 2021 altcoin season started. From lows to the highs FTT has seen an increase of 1601%.
Over the last four weeks, the Bitcoin dominance has risen 15%, and in turn, most altcoins are down. For example, FTT is down 47% over the same four weeks. Institutions and big money have started investing in BTC.
This FTT/BTC daily chart shows a possible support range where FTT has been getting some support points.
When we zoom in close with the one hour chart FTT continues to get that support at about 95,200 sats. Will it hold this time? To go back to all-time high from here is about 85% gain.
As we now look at FTT against USD on the 4-hour chart over the last three weeks, it has been hovering sideways between $48 to $61, with it being smack in the middle of that range.
The Other Trend Lines
We profile a coin or token in each newsletter and then give a quick take on their value against BTC and USD. Why do we start with BTC first? We think you should make BTC your base investment. For example, ETH being the second largest crypto asset, many believe it will over-perform BTC over the next few years. It is still good to compare against BTC. ETH went up about 250% against BTC in the last run-up.
The above chart was on the weekly scale and gave you an idea of ETH/BTC over a longer time frame. This next one is on the daily chart. From the peak in early September, ETH is down over 20% against BTC.
As we profile different crypto assets, it is easy to see that ETH was not even close to the best investment. For example, SOL was up 11000% in the same time that ETH only went 250%. DOGE, which we would not consider a solid investment, is still up over 2000% and went as high as 6000% against BTC.
With these sort of gains you’d think it is late to start investing today, but that is wrong. Do your research and start investing and you will be happy you did a few years from now.
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 432% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $49,022 and $57,768 USD in value.
FUND 3 started on November 16, 2020, with $1000 USD in value and was invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has had a gain of 106% since the start. The USD fund value is up 608% since the beginning. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is down -27% against BTC. ETH is up 125% against BTC since the start. ADA has a gain of 513% against BTC and 1992% to USD.
BLWX Fund started on February 22, 2021. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. BAT has a gain of 21% against BTC since the start; LINK is down -21%, WAVES is up 125%, XMR is up 10%. Overall, against BTC, the fund is up 34% and 40% against USD.
Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you amazing gains if you manage your risk. As a long-term investor, we see it as our largest portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some.
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Madbyte does have its own token called MADX on the Ethereum network and Madbyte on the Waves network. The two tokens are interchangeable on Madcapx.com.
Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.