Crypto markets initially buoyed by Binance's deal to buy FTX

Quick Take

  • FTT hurtled toward $20, up 38% in minutes following the Binance-FTX announcement.
  • Bitcoin rose back above $20,000 shortly after.

Crypto prices popped following the announcement of Binance's blockbuster deal to acquire rival 

FTX's FTT token jumped 38% to almost $20 at 11:12 a.m. The price of the native exchange token had dropped more than 40% since Saturday when Binance CEO Changpeng Zhao said that his exchange would sell its FTT tokens.

The token surrendered some of the deal-related gains, trading at $16.39 at 12:30 p.m., according to data via TradingView.

The news also lifted bitcoin, ether, and other cryptocurrencies. Bitcoin was trading at $19,811, up from around $19,500 shortly before the announcement. The leading cryptocurrency by market cap had rise as much as 5% to $20,600 but had surrendered much of these gains by mid-day trading. 

Meanwhile, ether traded above $1,500, up about 3% short following the news. Ethereum's native coin was trading at $1,504 at 12:30 p.m. ET. 

Binance agreed to acquire following the collapse of the exchange's token FTT. FTX CEO Sam Bankman-Fried announced the deal in a Twitter thread, and Binance's CZ confirmed the purchase in another thread, adding, "to protect users, we signed a non-binding LOI, intending to fully acquire and help cover the liquidity crunch."

The terms of the deal have not been disclosed, and CZ quickly noted that the agreement is still pending due diligence. "This is a highly dynamic situation, and we are assessing the situation in real-time. Binance has the discretion to pull out from the deal at any time," he said

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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