Here's Why Cryptocurrency FTX Is Soaring Today

© Provided by The Motley Fool Here’s Why Cryptocurrency FTX Is Soaring Today

What happened 

The FTX Token (CRYPTO: FTT) is up 16.7% in the past 24 hours to $69.37 apiece as of 10:30 a.m. EDT today. It has now become the 27th largest cryptocurrency in the world, with a market cap of $6.423 billion. Two days ago, its developers acquired LedgerX, the first trading platform for cryptocurrency derivatives approved in the U.S.

© Getty Images Derivatives text box stamped on a background of pen and paper.

So what

LedgerX has brokered over 10 million cryptocurrency options and swap contracts since its inception in 2017. The move would enable regulatory-approved products, such as Bitcoin and Ethereum futures, to be traded on the FTX derivatives platform as well. Approximately $350 million worth of cryptocurrencies changed hands on FTX in the past 24 hours. The platform also runs Blockfolio, a popular cryptocurrency portfolio tracking app with over 1 million downloads on Alphabet‘s Google Play. 

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FTT tokens are the native cryptocurrencies of FTX. It is used as collateral for margin trades. In addition, FTX will burn FTT equal to one-third of exchange fees in a process similar to stock buybacks. On top of that, FTT holders can earn rewards from the exchange’s liquidity fund in a process similar to stock dividends.  

Now what 

During an interview in July, Sam Bankman-Fried, the billionaire CEO of FTX, said that he plans to one day buy out Goldman Sachs or CME Group if the exchange grows big enough. It’s a very ambitious goal, but both FTX and its native token have been gaining a lot of traction lately. I recommend interested cryptocurrency investors to check them out. 

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Zhiyuan Sun owns shares of Ethereum. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Bitcoin, and Ethereum. The Motley Fool recommends CME Group. The Motley Fool has a disclosure policy.

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