FTT price barely holds $1 as Binance's CZ hints at a new proof of reserve mechanism

FTT price is deep in the red nearly a week since its native platform FTX exploded, wrecking almost the entire cryptocurrency market. In just a few days, FTT's value has plummeted to near zero, although it is holding at $1.36 at the time of writing.

Investors and crypto-related businesses are yet to recover from the impact of FTX's implosion. Many are counting potential losses into millions of dollars due to exposure to FTX, Alameda and affiliated companies.

Hbit, a Hong Kong-based crypto platform, reported about $18.1 million that is now stuck in the bankrupt FTX. According to the exchange, $13.20 million of the funds were customer deposits, while the remaining $4.90 million were in Hbit assets.

"As FTX group entities, including FTX, have filed for bankruptcy protection in the United States on 11 November 2022, the cryptocurrency assets may not... be withdrawn from FTX," a statement by Hbit to shareholders reads in part.

Other exchanges counting possible losses are Crypto.com at $10 million and Genesis at $175 million, among others.

Binance charts the way forward from FTX collapse

The CEO of Binance, Changpeng Zhao (CZ), in an ask-me-anything (AMA) forum held on Twitter on Monday, said that his exchange will collaborate with Vitalik Buterin, the co-founder of Ethereum, to launch a new proof of reserve mechanism to champion for transparency in the industry. Following the development, Binance revealed that it has almost $70 billion reserves.

The crypto market flipped green on Monday, aided by CZ's announcement of a fund that could be tapped by crypto businesses badly impacted by the liquidity crunch at FTX. In the AMA, the CEO said four or five funds had already reached out for recovery funds. However, the cries from its portfolio companies were not as loud.

What's next for the crypto market

The shockwaves from FTX across the crypto industry will have far-reaching effects and cannot be wished away. CZ admits this might be a long crypto winter with unlikely significant recovery. Remember, besides the woes in the crypto market, global economies are still grappling with inflation and other uncertainties which could further stifle growth.

FTT price freefall seems unstoppable

FTT price exchanged hands around $24.00 at the beginning of November. It appeared to have bottomed out at the $20.00 level, but the implosion of FTX turned the token upside down. Although other cryptocurrencies seem to have exhausted their downtrends, FTT continues to wade deeper into murky red waters.

FTTUSD weekly chart

The token dodders at $1.36 in the early American session and presents no hope for a rebound. FTT has set a new all-time low at $1.15, with the possibility of finishing its journey at zero unless investors quickly flip sentiments positively.