Sentiment in the cryptocurrency market still remains bearish as market selling intensified, after dovish US inflation data raised fears of a possible hike in the US Federal Reserve’s key rate.
Bitcoin, after gaining and appearing to be heading towards $31,000 over the week, fell as the bears took over, with the cryptocurrency’s flagship asset declining and falling below $28,000.
Although the 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 top 100 rally. Here’s why:
UNUS SED LEO LEO +9.85%
- UNUS SED LEO is a utility token used in the iFinex ecosystem. The name is based on a Latin quote from one of Aesop’s fables. Cryptocurrency allows Bitfinex users to save money on trading fees. The extent of the discount depends on the amount of LEO the customer has in their account and the savings offered are split into 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 in the top 20 cryptocurrency list, as it currently ranks 16th. While the market sold off for most of May and also into June, LEO barely managed to hold its value. This means that while all the coins around it were selling, the LEO coin managed to hold its value, thus automatically moving up the ranks.
- The reason for the price hike is due to an increase in interest in the token. According to data from Glassnode, active addresses using the coin have steadily increased over the past couple of days, especially since the start of May. However, this may be because it caught the attention of many traders.
- Looking further, the Network Value to Transactions (NVT) ratio for LEO is also reasonably low. This therefore indicates that the coin has an attractive valuation when it comes to transactional value on the blockchain. Quite similar to the PE ratio in traditional stock markets, the NVT ratio is defined as the ratio of market capitalization to trading volume over a given period.
In summary, LEO could act as a hedge against future mishaps like it did this time. Indeed, since early May, LEO has barely corrected by 16% while Bitcoin has bottomed out by more than 30% in the same time frame. However, this line of thinking must stand the test of time.
FTX FTT +6.00%
- FTT is the native cryptocurrency token of the FTX crypto derivatives trading platform launched on May 8, 2019. The team behind FTX includes some of the biggest crypto traders over the past few years who, after finding issues with most mainstream crypto futures exchanges, decided to launch its own platform. FTX claims that it stands out with features such as recovery prevention, a centralized collateral pool, and universal stablecoin settlement.
- FTT is an exchange token which is a class of cryptocurrencies associated with a cryptocurrency exchange. By nature, exchange tokens like FTT are less risky than most cryptocurrencies available because they have direct and real-world use cases. Nor are they based on speculation. These tokens power crypto exchanges, giving them a chance of survival as they are used daily. This means that the coins are in circulation almost every time.
- The FTT is one of the best coins to hold given that it has an active burn mechanism to keep its supply low. The burning mechanism is done through a redemption and burning process. It is currently ranked #19 with a market cap of $3.7 billion.
- Since FTT derives value from the performance of the FTX exchange, the reason for the rally can be attributed to FTX trading volume exceeding that of Coinbase in May. Bitcoin spot trading volume on FTX surpassed Coinbase for the first time, hitting $30 billion in a single month. Tushar Jain, co-founder of Multicoin Capital, who is co-owner of FTX, shared the chart highlighting when FTX overtook Coinbase in trading volume.
- FTX is now the second-largest centralized exchange by trading volume, according to CoinMarketCap. Binance still tops the charts with a whopping $17 billion a day, but FTX is now trading over $2 billion a day in second place.
Moreover, FTT ranks fourth among centralized exchange tokens according to statistics. The FTT token is up 6% per week, despite worrying macro factors weighing on the broader market. Only Bitfinex’s LEO token outperforms it in position 2 with a gain of 10% in the last seven days.