The Fantom Foundation’s attempt to dispel concerns about potential FTX exposure has been a success thus far for FTM price.
Fantom (FTM) continued its upward momentum on Nov. 30 amid reports that the Fantom Foundation generates consistent profits and has 30 years of the runway without having to sell any FTM tokens.
Fantom’s FTM holdings up from 3% to 14%
FTM price gained nearly 13.5% to reach $0.24, its highest level in three weeks. The rally came as a part of a broader rebound trend that started when it bottomed out at around $0.17 on Nov. 22. This amounts to a 50% price rebound in the last eight days.
Interestingly, the rally picked up momentum after the Fantom Foundation’s “Architect,” Andre Cronje, released the firm’s financial records on Nov. 28, revealing that it had $340 million worth of digital assets and had been earning over $10 million annually. Notably:
“Nov 2022 — Over 450,000,000 FTM, > $100,000,000 in stables, > $100,000,000 in crypto assets, $50,000,000 in non-crypto assets. Salary burn rate $7,000,000 / year. We have ~30 years left (without having to touch FTM)”
Certain crypto and blockchain projects have suffered due to their potential exposure to failing companies.
For instance, the collapse of the FTX crypto exchange triggered major price declines in Solana (SOL) and its associated project tokens such as Serum (SRM). FTX and its sister firm Alameda Research were Solana ecosystem’s major supporters.
In February 2021, Alameda also purchased $35 million worth of FTM tokens to become a validator on the Fantom blockchain. This exposure may have been a key factor behind FTM’s underperformance in the early days of November, wherein its price declined by as much as 35%.
Cronje downplayed any connection with FTX/Alameda, explaining that being a validator does not make one part of the foundation.
“Unlike most of our competitors, the foundation owns a relatively small amount of FTM,” he wrote, adding:
“Most comparable L1s own between 50% — 80% of their token supply. At launch, Fantom owned less than 3%. Today, we own more than 14%. We prefer buying our tokens; we don't ‘sell’ our tokens for ‘partnerships.’”
Cronje also revealed that Fantom passed on further cooperation with Alameda in January 2022.
FTM whales and fishes accumulate
Fantom’s on-chain data reveals that addresses holding more than 1 million FTM have been distributing the tokens during the FTX-led crypto market decline.
On the other hand, the supply of Fantom tokens held by addresses with a balance between 1 and 1 million FTM increased in November, suggesting strong accumulation among the network’s richest (whales) and poorest (fishes) investors.
In other words, these investors anticipate FTM to undergo a strong price recovery in the future.
Related: Learn from FTX and stop investing in speculation
Technicals support the bullish outlook to a certain degree. FTM price now eyes a nearly 20% rally toward $0.30, which coincides with the token’s prevailing descending channel’s upper trendline and its 50-3D exponential moving average (50-3D EMA; the red wave), as shown below.
Conversely, testing $0.30 as resistance could have FTM eye a strong pullback toward the descending channel’s lower trendline near $0.16, which has also served as support in July 2021, or a 30% price decline from today’s levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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