Bitcoin’s (CRYPTO: BTC) price has dropped 4% in the last 24 hours to US$37,749. This puts the year-to-date depreciation for the world’s largest cryptocurrency by market capitalization to 21%.
Furthermore, it is not just the value of Bitcoin that has been pushed down. From January 1, the value of Ethereum (CRYPTO: ETH) has fallen by a dismal 30 percent. However, the situation for the broader bundle of cryptocurrencies is even worse.
According to CoinMarketCap data, except for three stablecoins (linked to fiat currencies) exhibiting marginal percentage increases in 2022, just two of the top 80 cryptocurrencies are in the green.
FTT & Leo Outpace Bitcoin
If one navigates down the selection of top cryptocurrencies by market capitalization, they will ultimately reach number 26, FTX Token (CRYPTO: FTT), and number 27, Unus Sed Leo (CRYPTO: LEO).
FTT was up 4% from the beginning of the year when writing. Although this is not a significant gain, keep in mind that the Bitcoin price has fallen by 21% within the same timeframe. In addition, the S&P/ASX 200 Index (ASX: XJO) has dropped 8%. Leo, on the other hand, offers a genuinely explosive profit. Thus far, in 2022, it has risen 57 percent.
So, what exactly do these tokens do?
FTT is the native crypto token of the cryptocurrency derivatives trading network FTX. Leo, on the other hand, is a utility token, which is employed throughout the iFinex ecosystem. Users of Bitfinex can save money on trading costs by using Leo.
To put it another way, they are both exchange tokens, as the term implies.
Why Are Exchange Tokens Performing Better?
As per cryptocurrency specialists, the strong growth of Leo and FTT over the value of bitcoin in 2022 is primarily related to the instability that has gripped cryptocurrency industries in recent months.
Exchange tokens generally perform well when the organizations (crypto exchanges) they link to function well.
Clara Medalie, research director at cryptocurrency exchange data company Kaiko, stated that FTX’s token is highly connected with good media exposure. Medalie went on to remark that FTX has had a stronger year than most of the other exchanges with their native exchange tokens, so the FTT gain is not unexpected.
Judging the Bitcoin value trend, Jeff Dorman, CEO of digital asset fund manager Arca, stated that for some reason, individuals still assume Bitcoin is a security asset, even though it has practically no defensive features. Exchange tokens ought to be defensive since there are actual revenues, cash flows, and amortizations.
Dorman cited greater instability and trading volume as advantages for tokens such as Leo and FTT compared to Bitcoin and Ethereum. According to him, the exchanges are the ones that essentially stand to benefit from volatility. Therefore, since the volume and revenue of exchange tokens are increasing, it is apparent that they will excel. Dorman further stated that smart investors are putting their money into exchange tokens.
We will still see how the rest of 2022 unfolds; however, exchange tokens such as Leo and FTT have left the Bitcoin price behind in their trail.
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