From FUD to FOMO: How FTX traders reacted to SBF’s ‘gm’ tweet
Journalist
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Key Takeaways
What triggered FTX’s current spike?
A single tweet from Sam Bankman-Fried despatched FTX parabolic, driving a 37% worth bounce and a 65% surge in derivatives Open Curiosity.
What does this inform us about market conduct?
FOMO has shifted from dismissing FTX information as FUD to treating hype as a bullish sign, exhibiting how positioning reacts immediately to social cues.
2021 was the yr Elon Musk’s Dogecoin [DOGE] tweets actually moonshot the market. 1,000%+ pumps, shopping for frenzy, and DOGE flexing as the highest memecoin by market cap. What adopted? A authorized headache.
Quick-forward 4 years, and it appears nothing has modified.
Sam Bankman-Fried, the incarcerated founding father of FTX, dropped a easy “gm,” and the crypto market went right into a frenzy. Social media erupted, and hypothesis ran wild, exhibiting simply how fragile the market nonetheless is.
Supply: X (Previously Twitter)
For context, Sam Bankman-Fried launched FTX in 2019 as a pro-focused derivatives change. Actually, the change shortly scaled to one of many top-volume platforms in crypto.
Nonetheless, in November 2022, an enormous liquidity crunch uncovered shaky steadiness sheets and mismanaged buyer funds, triggering a full-blown collapse. Billions had been wiped, and SBF landed in authorized scorching water.
Towards that backdrop, his “gm” textual content sparked a storm of theories. The larger takeaway? It gave the market a glimpse of how positioning may swing if SBF ever re-enters the scene. A delicate sign, maybe?
FTX went parabolic on renewed market hype
The ripple impact of a single tweet was apparent throughout FTX’s markets.
On the twenty third of September, FTX’s native token [FTT] spiked 37% from its $0.80 base, marking its largest transfer in practically a yr. The token bounced again to round $1.30, with the market cap hitting near $400 million.
The true motion, although, was within the derivatives area. FTT’s Open Curiosity (OI) jumped to a two-month excessive of $4.21 million, marking a 65% surge from the day before today. That’s about $1.65 million flowing in as hypothesis.
Supply: CoinGlass
In brief, the market flipped “bullish” proper after the tweet.
Why does it matter? Despite the fact that the pardon hype fizzled after a post claimed somebody tweeted on SBF’s behalf, the transfer nonetheless confirmed how reactive positioning can get when FOMO kicks in.
The important thing right here is that FOMO this time constructed on “hype.” There was a time when merchants would shrug off FTX information as FUD, however now the identical headlines are triggering momentum performs, signaling a delicate shift in market sentiment.
