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However, it is also reasonable that FTX creditors are seeking a less problematic exit. The FTX 2.0 reboot proposal is included in the reorganization plan submitted on Monday, July 31.
FTX 2.0 Exchange Plans Have High Expectations
The announcement of the filing led to a surge in FTT tokens from $1.34 to $1.55. Nevertheless, shortly thereafter, they dropped even lower than their previous levels. Those holding FTT tokens and closely monitoring the market had a brief opportunity to sell with some profit margin.
It appears that the proposal has multiple drawbacks. For starters, it would resemble the revival of Enron, the Exxon Valdez incident, or Lehman Brothers.
What is the rationale for this instead of initiating a fresh start as suggested by the Kraken CEO?
“FTX 2.0 would be worse than starting from scratch. No team, no tech, no licenses, no banking, tarnished brand.” -Kraken CEO Jesse Powell, Aug 2
Moreover, it presents an overly complex plan for cryptocurrency investors.
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What Investor Would Choose FTT Over BTC and ETH?
They are likely to sell FTT tokens to newcomers who are unfamiliar with FTX or SBF. Subsequently, these funds will be used to purchase bitcoin and ether. In the meantime, they will generate revenue to cover expenses during the bear market.
As the cryptocurrency market experiences long-term cyclical growth, they will repurchase or burn just enough FTT tokens to maintain momentum while retaining any additional profits from their BTC and ETH holdings.
A reestablished FTX might provide yield-bearing accounts rather than concentrating on the tokens. However, the underlying strategy would remain unchanged. They would distribute yields funded by venture capital during the bear market, then utilize gains from BTC and ETH during the bull market, keeping the remainder as profit.
This mirrors what SBF did and mismanaged, leading to insolvency. Why would anyone other than the least informed and most susceptible new crypto retail investors consider using FTX 2.0 as an intermediary custodian for their BTC and ETH?
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