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FTM Price Plunges Amidst Abnormal Multichain Outflows

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After Bitcoin jumped past $31,500 on Thursday to hit a 13-month high, the largest cryptocurrency took a tumble under $30k. Now, ahead of the weekend, on Friday, Bitcoin is trading at around $30,165.

Bitcoin in red means the majority of the crypto market is in red, too, with altcoins taking an even bigger drop. Ether also fell under $1,830 and is trading at just above $1,860 as of writing. While among the top 100 cryptos, Kaspa managed to record 11% gains, some of the biggest losers in the past 24 hours have been PEPE (11%), ApeCoin (10%), Lido (9%), FXS (8%), Mina Protocol (7.8%), Litecoin (7.7%), Flow (7%), and Curve (6%). 

These losses have the total market cap down by 2.9% at $1.215 trillion. 

Thursday's exuberance came when the CEO of the largest asset management firm in the world went on television to talk about how Bitcoin could “revolutionize finance.” Once a crypto skeptic, BlackRock CEO Larry Fink has changed his views about cryptocurrency, which he says is “digitizing gold in many ways.” As for Bitcoin, Fink said it is an “international asset” that presents an alternative to people, and “crypto is digitizing gold in many ways.” 

Fink further shared that BlackRock hopes its track record will help its spot Bitcoin ETF application get approved. “What we're trying to do with crypto is make it more democratized and make it much cheaper for investors,” he said.

While markets have been increasingly hopeful that the U.S. Securities and Exchange Commission (SEC) might finally approve a spot Bitcoin ETF, concerns about economic growth, a precursor to inflation, spooked the market.

Not just crypto but Wallet Street also sold off on stronger-than-expected U.S. jobs data. The ADP report showed the private sector added 497,000 jobs, more than double forecasts and the biggest monthly rise since July 2022. This leaves more room for the Federal Reserve to make more rate hikes to tame inflation. 

Minutes from the Fed's June meeting on Wednesday also showed that most officials would support more rate increases ahead. The market, however, is expecting a 0.25% rate hike in the July meeting but believes the central bank might soon be done with these increases, and with the halving coming next year in April, we could see a bull rally in the not-so-far future. 

Alex Kruger tweet

When it comes to Bitcoin holders, there has been a recent increase in whales. But despite this, large holders aren't moving their assets to exchanges, as per Glassnode data.

While this could be holders anticipating a bull run on the horizon, investors will likely be more cautious about exchange risk and regulatory hurdles after several crypto company failures last year. Still, large entities holding increasing amounts of bitcoin supply while a decreasing supply on exchanges indicate bullishness among investors.

This was also noted in the new issue of The Bitcoin Monthly, an “earnings report” that details on-chain activity. Cathie Wood of ARK Invest wrote that institutional investors and long-term Bitcoin holders are showing signs of improved bullishness, as shown by the BTC balance held on over-the-counter (OTC) desks that have hit an all-time high (ATH). Almost 8k BTC are sitting on these desks, representing a 60% increase this quarter.

Using OTC desks as a proxy for institutional activity, Ark said, “Institutions and other large capital allocators are focused increasingly on Bitcoin.” It further noted that about 70% of the 19 million circulating supply of BTC has not moved in over a year, yet another ATH. Out of 13 metrics in the report, only two of them were neutral while the rest flashed bullishly, it added.

Fantom (FTM) Performance 

Amidst the ongoing red in the crypto market, FTM is the biggest loser among the top 100 cryptos, with a 10.5% drop in price in the past 24 hours against USD and 7.9% against BTC. These losses resulted in a rise in market activity, as seen in the 206.8% increase in FTM trading volume to $222 mln during this period.

The $756 million market cap token is the 55th largest cryptocurrency which, as of writing, is exchanging hands at $0.269. These losses came after the token's price jumped 33.33% between June 12 and July 4. 

FTM is the native cryptocurrency of Fantom, a smart contract blockchain network known for its high speeds and low costs. To achieve this, the blockchain operates through a directed acyclic graph (DAG), where transaction histories are expressed as graphs of blockchain hashes. Additionally, Fantom uses a proof-of-stake (PoS) consensus mechanism called Lachesis, where transactions operate independently. Fantom is also compatible with the Ethereum Virtual Machine (EVM), meaning developers can easily move their projects to Ethereum. 

Fantom Foundation Tweet

The project was launched in 2019, but it wasn't until 2021 that it started gaining traction when the Ethereum blockchain became congested during the bull market. 

The Fantom Foundation is responsible for developing the platform, with Michael Kong as the CEO/CIO. The Foundation has raised a total of $40.1 million in funding, including $2.7 million from an ICO in June 2018. 

Now FTM is an inflationary token up to the point its fixed supply reaches 3.175 billion. Once all of the tokens have been issued, which is expected to occur in 2024, no more FTM tokens will be introduced into circulation. As of writing, almost 2.8 billion FTM tokens are in circulation.

New tokens enter circulation in two ways: stakers earn FTM tokens as a reward for confirming transactions on the blockchain, and early investors and founders use their FTM tokens.

If we look at FTM's 2023 performance, it is currently only up 33.44% year-to-date (YTD). White, the digital asset, started the year on a bullish note as it surged 22% up until early Feb. It dropped 47% in the following month. During the period of March 12 and April 19, the FTM token again rose more than 57% but has been on a downtrend ever since. It did find some relief in mid-June as Bitcoin gained institutional adoption, with several traditional financial heavyweights filing for spot Bitcoin ETFs.

FTM hit its all-time low at $0.0019 on March 13, 2020, and then during the 2021 bull market, it surged as high as $3.46. It is currently down 92.2% from its peak, in tandem with the broad crypto market.

While FTM's price is flashing red, the token was enjoying an uptrend in social and market performance earlier this week, as per LunarCrush. Meanwhile, its network growth has also been on the rise since the beginning of June though it did take a drop in the past couple of days, according to data from the intelligence platform Santiment. The network growth has been on the increase, much like the network's development activity which is rising from June-end lows.

The total value locked (TVL) across the Fantom network meanwhile continues to drop, currently at $165.66 million, down from $7.8 bln ATH in March 2022, according to DeFi Llama.

Click here to learn all about investing in Fantom (FTM). 

Fantom Network Development

Ethereum competitor Fantom is known for being fast and cheap, and earlier this year, the Foundation further enhanced its network with lower memory consumption, improved storage capabilities, and new security features.

“This technology can potentially help process transactions faster with much smaller memory consumption, thereby improving the network performance,” the Fantom Foundation wrote at the time. 

But the network isn't without concerns. It has actually been plagued by developer exits, including Andre Cronje. DeFi developer Cronje, who created Yearn Finance, was one of Fantom's leading contributors who announced his departure from the project in March 2022. Fantom Foundation CEO Kong, however, has tried to assuage investor concerns by pointing out that the “ecosystem consists of hundreds of developers building many great applications,” which “will continue” to happen.

Amidst all this, the largest cryptocurrency exchange Binance ceases all deposits and withdrawals for several Multichain tokens that are bridged to Ethereum, Binance Chain, Avalanche, and Fantom.

On Thursday, multiple bridge contracts operated by Multichain also recorded outflows. It stripped Multichain's Fantom bridge of nearly all of its holdings in wBTC, USDC, USDT, and a handful of altcoins worth over $130 million combined. 

Fantom Foundation Tweet 2

Since then, the Multichain service has been stopped, with the platform stating on Twitter that “all bridge transactions will be stuck on the source chains” and “there is no confirmed resume time.”

Click here to learn all about buying Fantom (FTM) tokens in just four steps. 

Focused on Overcoming Crypto's Pseudo-anonymity

While FTM and the broad crypto market are struggling, the regulators continue to keep an eye on the sector.

This week, the International Monetary Fund (IMF) also published a paper that said anti-money laundering (AML) rules are not a panacea for dealing with tax cheats who use crypto to cover their tracks. “Whether crypto withers or blossoms, the tax system still needs to deal with it,” said the agency, adding the first step is still to apply AML rules and third-party reporting requirements. According to the paper, centralized platforms like exchanges can help authorities gain information on digital asset ownership. 

The technology underpinning many crypto could actually be a boon for tax authorities, it further said blockchains are “remarkably transparent in the information they contain on the history of transactions.”

As per IMF, Artificial intelligence (AI) could also be used in some capacity “to identify potentially tax-relevant behaviors” that take place on-chain. Interestingly, now AI can also hold, send, and receive Bitcoin. Lightning infrastructure firm Lightning Labs said this week that they have built a set of tools that allow AI applications like OpenAI's GPT to perform these functions. These tools integrate high-volume Bitcoin micropayments via layer 2 network Lightning with popular AI software libraries like LangChain. 

Meanwhile, according to the IMF's paper, crypto transactions' pseudo-anonymity remains the main obstacle. This is because digital wallets comprise public and private keys, and if an entity doesn't link a person's name to a wallet, it's challenging for authorities to know who it belongs to. 

“Overcoming pseudo-anonymity is the core problem that tax administrations are now trying to address,” the IMF said. 

This comes after late last month, the IMF said countries considering banning crypto might be the wrong move as it offers several benefits to its adopters, such as faster payments, protection against macroeconomic uncertainty, and financial inclusion. 

While examining crypto usage across Latin America and the Caribbean, the report found that a few countries have completely banned crypto due to their risks, but “this approach may not be effective in the long run.”

Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.