The sentiment in the cryptocurrency market still remains bearish as the market sell-off intensified, after a dovish U.S. inflation data that sparked fears of a possible increase in monetary policy rate by the U.S Federal reserve.
Bitcoin, having gained and seems to be headed towards $31,000 during the week, fell as the bears took over, with the flagship cryptocurrency asset declining and falling below the $28,000.
Although majority of the top 100 cryptocurrencies by market capitalization posted weekly declines, however, gains from LEO and FTT, led the rally in the market, posting gains of 5% and more as exchange tokens are leading the rally of the top 100. Here’s why:
UNUS SED LEO’s LEO +9.85%
- UNUS SED LEO is a utility token that’s used across the iFinex ecosystem. The name is based on a Latin citation from one of Aesop’s fables. The cryptocurrency allows Bitfinex users to save money on trading fees. The extent of the discount depends on how much LEO the customer has in their account and the savings on offer are spread across three tiers. There are fluctuations depending on whether a trading pair is crypto-to-crypto, or crypto-to stablecoin.
- The LEO token has become the talk of the cryptocurrency community, especially since it became the latest entrant into the top 20 cryptocurrencies list, as it currently ranks #16. While the market sold off for the better part of May and also in June, LEO just managed to retain its value. This means that while all the coins around it were selling off, LEO coin managed to retain its value, thus automatically rising up the ranks.
- The reason for the rally in price is due to an increase in the interest for the token. According to data from Glassnode, active addresses using the coin have been on a steady rise in the past couple of days, especially since the beginning of May. However, this may be because of the fact that it has caught the attention of a lot of traders.
- Looking further, The Network Value to Transactions (NVT) ratio for LEO is also reasonably low. This, therefore, points to the fact that the coin is at an attractive valuation when it comes to transacted value on the blockchain. Quite similar to the PE ratio in traditional equity markets, the NVT Ratio is defined as the ratio of market capitalization to the transacted volume in a specific time period.
In summary, LEO could act as a hedge against future crashes like it did this time. This is because from the beginning of May, LEO corrected hardly by 16% while Bitcoin has touched a low of over 30% in the same timeframe. However, this line of thought needs to stand the test of time.
FTX’s FTT +6.00%
- FTT is the native cryptocurrency token of the crypto derivatives trading platform FTX launched on May 8, 2019. The team behind FTX comprises some of the largest crypto traders over the past few years who, having found issues with most mainstream crypto futures exchanges, decided to launch their own platform. FTX claims that it stands out due to such features as clawback prevention, a centralized collateral pool and universal stablecoin settlement.
- FTT is an exchange token which is a class of cryptocurrencies that are associated to a cryptocurrency exchange. By nature, exchange tokens like FTT are less risky than most available cryptocurrencies as they have direct and real-life use cases. They also are not based on speculation. These tokens power crypto exchanges, giving them a chance at survival since they are used daily. That means the coins are in circulation almost every time.
- FTT is one of the best coins to hold considering that it has an active burning mechanism to keep its supply low. The burning mechanism is done through a buy-back and burn process. It is currently ranked #19 with a market capitalization of $3.7 billion.
- Being that FTT gets value from the performance of FTX exchange, the reason for the rally can be traced to FTX trading volume surpassing that of Coinbase in May. The spot Bitcoin trading volume on FTX has surpassed Coinbase for the first time, hitting $30 billion in a single month. Tushar Jain, Co-Founder of Multicoin Capital, who are part owners of FTX, shared the chart highlighting the moment FTX passed Coinbase in trading volume.
- FTX is now the second-largest centralized exchange by trading volume, according to CoinMarketCap. Binance still tops the chart with a massive $17 billion per day, but FTX now trades over $2 billion per day in second place.
Further, FTT is in fourth place among centralized exchange tokens according to statistics. The FTT token is up 6% weekly, despite worrying macroeconomic factors that are weighing down the entire market. Only Bitfinex’s LEO token is outperforming it at position 2 with an 10% gain in the last seven days.
