What's Driving Token Prices? November 16, 2022

Katie Talati
Nov 16, 2022

Join Katie Talati, Arca’s Head of Research, weekly on Wednesday at 4PM EST / 1PM PST as she shares notable token activity over the past week and her insights on what market events drove these token price movements.

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  • FTT (-50%) - It has been an action-packed week since we last chatted about FTX. In case you missed it, FTX suffered a bank run beginning Sunday, November 6 and continuing until withdrawals were halted on November 8. Following this, CZ and SBF announced Binance was exploring an acquisition of FTX. Since last week’s episode, that acquisition deal officially fell apart after Binance began the due diligence process. Instead, Tron Founder Justin Sun stepped in to see if he, along with Huobi (of which he owns a majority stake and is a board member), could find a way forward for FTX. Unfortunately, nothing transpired. On Thursday last week, FTX officially filed for Chapter 11 bankruptcy. In the meantime, FTX US—which had gone mostly unscathed—suffered a “hack” on Friday as funds were siphoned from the exchange. Many believe it was an internal theft. With the bankruptcy proceedings beginning, SBF has officially been fired from FTX; Alvarez and Marsal, the firm installed to lead the proceedings, have hired John J Ray III (previously the Chairman appointed to unwind Enron).

  • SRM (-13%) - Serum, the Solana-based liquidity project, voted this weekend to fork its token to wrestle control of its codebase away from FTX. As the original creator of Serum, FTX had the private key that allowed changes to Serum’s codebase versus its DAO. The Serum community also suspects that Serum might have been compromised during the FTX hack on Friday. To date, most projects within the Solana ecosystem have moved over to support the new Serum fork.

  • ATOM (-2.3%) - Layer 1 protocol Cosmos saw an important vote for “ATOM 2.0” defeated last week. The ATOM 2.0 vote included proposals to change the token issuance schedule for ATOM and add new features to the token that would make it more valuable longer-term. Jae Kwon, the founder of ATOM, led the opposition in this latest vote and garnered enough delegates right as the vote was closing to defeat it. Many see this as a blow to ATOM’s long-term value accrual.
  • JOE (+6.2%) - Avalanche-based decentralized exchange Trader Joe announced Monday that its NFT marketplace spinoff, Joepegs, raised $5M in a seed round. The round was led by Avalanche and FTX Ventures (likely one of the last checks they wrote). The exchange launched in May and has seen over 12,000 users and $3.4M in volume.


DISCLAIMER: This commentary is not intended to be investment advice, investment research, or a recommendation. Please consult your investment professional for your own circumstances."


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Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, legal advice, tax advice, a research report, or a recommendation. Any decision to invest or take any other action with respect to any investments discussed in this commentary may involve risks not discussed, and therefore, such decisions should not be based solely on the information contained in this document. Please consult your own financial/legal/tax professional.

Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed are those of the author, and are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. Arca disclaims any obligation to update or revise any statements or views expressed herein. Past performance is not a guarantee of future results and there can be no assurance that any future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which is believed to be accurate, but has not been independently verified. Arca and/or certain of its affiliates and/or clients may now, or in the future, hold a financial interest in investments that are the same as or substantially similar to the investments discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and Arca and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities, or a solicitation to provide investment advisory services.

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