Why Fantom’s Cryptocurrency Is Collapsing Today

What happened

Ghostit is (CRYPTO: FTM) The FTM token is seeing big sell-offs in today’s trading. The cryptocurrency was down about 16.5% in the previous 24-hour period as of 2:45 p.m. ET Saturday.

Almost all of the non-stable tokens among the top 100 cryptocurrencies saw substantial sales over the past day, but FTM was the biggest loser of the cohort across the board. In addition to the selling momentum affecting the crypto market as a whole, Fantom’s cryptocurrency appears to be losing ground due to the operation of a decentralized finance (DeFi) application that runs on its blockchain.

Image source: Getty Images.

So what

With a host of economic and geopolitical risk factors making markets jittery, many investors are selling cryptocurrencies and taking money off the table. Bearish momentum has shaped the crypto market as a whole over the past week of trading, and it’s no surprise to see tokens that have seen coin-specific negative catalysts highlighted see pullbacks particularly important.

News emerged on April 28 that a hacker had stolen around $13.4 million from the Deus Finance trading app that runs on Fantom’s blockchain network, following a $3 million theft. dollars that occurred in March. The Fantom blockchain was designed to enable fast and inexpensive transactions, and it has attracted some support as a potential rival to Ethereum, but it seems that the recent exploits of Deus Finance raise some security issues. The FTM token is now down around 34% in the last seven trading days.

Now what

Without more details on the Deus Finance hacks, it’s unclear if the exploits specifically point to weaknesses in the app or if thefts were possible due to issues with the Fantom framework. However, it appears that some FTM whales are now leaning towards the latter scenario, and the cryptocurrency could see more major selloffs if weaknesses in the underlying blockchain are confirmed or become more widely suspected.

After recent selloffs, Fantom now has a market capitalization of around $1.9 billion and ranks 50th among global cryptocurrencies in terms of valuation.

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Keith Noonan has no position in the stocks mentioned. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.

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