What happened
Despite the fact that FTX continues to be in serious financial trouble, the FTX Token (FTT -0.61%) us up 16.5% in the past 24 hours as of 3:50 p.m. ET.
The token's low price in the last 24 hours is $2.06, which came after Binance said it wouldn't complete an acquisition of FTX.
So what
It was only Tuesday that FTX ran into clear liquidity problems and turned to Binance for a potential buyout. Binance signed a letter of intent, but still needed to look at FTX's books before closing a deal. Ultimately, Binance didn't like what it saw and by early Thursday the deal was off, sending FTX Token into free fall.
FTX founder Sam Bankman-Fried said the company is looking for more liquidity this week and will prioritize returning customer funds. But it's not clear the company has any real future and that means the token, which was used to earn rewards like trading discounts on FTX, is likely worth nothing.
Now what
The jump in the price of FTX is likely speculation by traders or some traders closing out short positions. The stock of companies that go bankrupt will sometimes trade higher because there are short-sellers who still need to buy back a stock to close out their positions, even if the company is worth nothing. Something similar could be happening with this cryptocurrency.
I still wouldn't be buying FTX Tokens today because the token doesn't have any real value in the future. But that hasn't dampened an exciting day today.
