FTX cryptocurrency company is incorporated in Antigua and Barbuda and headquartered in The Bahamas. FTX considered one of Binance’s main competitors, FTX has quickly established itself as one of the benchmark platforms in the cryptocurrency world. Let’s find out what FTX offers, between tokenized shares, cryptocurrency exchange and leverage effects. Here is our full tutorial and review of FTX.
❗Warning: The FTX platform is currently experiencing a liquidity crisis and is blocking cryptocurrency withdrawals. Do not use FTX and its services during this uncertain period, your funds will be blocked for an indefinite period. The situation will be resolved if Binance does complete the takeover of FTX.
The founder of FTX is Sam Bankman-Freed (hereinafter referred to as “SBF”). SBF was born in California, USA in 1992, and graduated from MIT in 2014 , majoring in physics. After graduation, SBF joined Jane Street Capital , a top quantitative trading firm on Wall Street . In 2017, SBF founded Alameda Research, a cryptocurrency quantitative trading company , which jumped to the top quantitative company in the industry within a year. In May 2019, SBF founded the digital asset derivatives trading platform FTX.
What is FTX?
The famous FTX platform was founded in 2019 by Sam Bankman-Fried, a former professional trader who passed through Wall Street and graduated from the Massachusetts Institute of Technology (MIT). The platform is also known for its famous maxim “by traders, for traders”.
FTX is a cryptocurrency trading platform that offers a wide range of tools and possibilities such as the use of leverage, derivatives, futures, a spot market and many other things. In parallel with crypto-currencies, this platform also offers the possibility of investing in tokenized shares, including Tesla, Apple, Google, PayPal and even Netflix.
It also has its own token, the FTT, of which we will detail the specificities and the advantages it can offer later in the tutorial.
FTX quickly experienced resounding and growing success: in the year 2020, it was able to observe a total trading volume of US$ 385 billion. The following year, in 2021, $10 billion was traded daily on the platform and statistics report one million monthly active users.
Beyond pure trading statistics, FTX offers aggressive marketing through partnerships in many areas such as sports, gaming or motor racing. Thus, the brand offers itself a leading position beyond the sole universe of cryptocurrencies. It is also today the official sponsor of many sports and e-sports teams.
Behind Binance, but far ahead of Kraken, FTX stands out as the main competitor of the famous Changpeng Zhao platform and the trend could well continue in this direction. Indeed, the number of FTX users is growing exponentially.
Another remarkable point, since its creation, FTX has never been the victim of a hack and has never had the slightest security breach to deplore.
How to open an account on the FTX platform?
You can register on FTX by clicking on the button below. In addition to supporting us, this one allows you to benefit from a 5% discount for life on all your trading fees related to FTX.
1. On the registration page, fill in your email address, choose a secure password and click on “Create Account”.
If you are registering as an individual, select “Individual”. Otherwise, select “Institution” if you represent a company.
2. Then fill in the required fields with your personal information and validate. A window will open to warn you that you only have a restricted account.
In order to take advantage of all the possibilities of the platform, including trading, you will have to give additional information (KYC) about your identity to FTX.
So click on “Continue to level 2”.
Then click “Start” to start the identity verification process.
In order to confirm your identity, FTX needs one of your official documents, either a passport, a driving license or your identity card.
Select the document of your choice. You can either take a picture of it from your webcam or upload it from your mobile phone, in which case click on “Continue on mobile”.
Then scan the QR code that appears and complete the process via your phone by following the instructions.
Back on your computer, click “Submit Information”.
You will then have to wait while the platform checks your documents, it is never very long, but it can last a maximum of a few days.
Anyway, while waiting for your documents to be verified, you can familiarize yourself with the various tools available on FTX.
Steps to buy cryptocurrencies in euros on FTX
FTX allows you to buy cryptocurrencies directly from its platform, but you will first have to deposit euros via credit card or bank transfer.
To do this, go to the “Wallet” tab.
On the “USD” line, click on “Deposit”.
Note: it doesn’t matter what currency you pay with, it will automatically transfer to USD on FTX.
The page that opens offers you several options: deposit stablecoins backed by the US dollar, make a deposit by credit card or even make a transfer.
As an example, we will buy cryptocurrencies by credit card with FTX. You will therefore have to click on “Deposit via Card”, then fill in your bank card information.
Note that the card you use must be in the same name as the one you declared when you registered on FTX.
Once your card information has been entered, click “Submit”. An automatic process will verify your card information, it shouldn’t take more than a minute.
Then choose the amount in USD that you wish to deposit and confirm.
Once the USD is in your portfolio, go to the market tab, then go to the “Spot” section. Take the example of the BTC/USD pair.
Then, in the order list, choose “Market order”.
Fill in the “USD” field with the amount you want, then place your order. Its execution being instantaneous, your BTC will be directly credited to your wallet.
The FTX interface
Although it may seem a bit confusing the first time around, FTX’s interface is relatively straightforward.
First, let’s see what makes up the top bar of the site.
“Markets”: to see the market in real time;
“Wallet”: to manage your FTX wallet;
“OTC”: “over-the-counter” function. This is a function intended for experienced traders who wish to invest considerable sums, so it is to be avoided when starting out;
“Support”: assistance tab of the site if you have any problem;
“FTT”: here you can buy and stake FTT tokens;
“NFTs”: marketplace for non-fungible tokens (NFTs). It is currently only available to users residing in the United States;
“Docs”: this tab will open a new page to the various tutorials of the FTX platform.
Understanding the “Markets” part of FTX
The “Markets” function is essential on trading platforms. It allows you to monitor the prices and trading volumes of cryptocurrencies in real time.
- “Futures”: This is a major function in trading, and more specifically on FTX, which translates to “futures market”. If you are new to this term, we advise you to read our dedicated sheet to better understand this principle;
- “Spot”: trading function without leverage or margin which translates to “spot market”. Unlike futures contracts, the assets here are traded directly. In this way, they are directly subject to the current market price;
- “Stocks”: here you can buy “tokenized” shares of different companies such as Tesla, Apple, Pfizer, Amazon or even Netflix for example. This is an almost exclusive feature of FTX that is only available on very few cryptocurrency trading platforms;
- “Leveraged Tokens”: these are ERC-20 tokens with pre-established leverage effects, generally on x3 leverages. This is a function implemented by FTX to limit the risks of traditional leverage trading, but which remains intended for users with a minimum of experience;
- “Volatility”: a somewhat special function that allows you to bet on the volatility of Bitcoin;
- “Prediction”: here you can bet on the victory of a candidate in the presidential elections of certain countries. If the contestant wins, the contracts will take on a value of $1, but drop to $0 if the contestant loses;
- “Fiat”: tab dedicated to stablecoins. Their price being modeled on fiat currencies, the stablecoin market is therefore only very little subject to volatility. You can buy stablecoins directly from this tab;
- “Recent”: history of actions you clicked on previously.
Use FTX Wallet
In this interface, you can track the value of your FTX wallet, manage your current positions, transfer assets out of FTX or even register a bank card to make purchases.
Let’s see what you can find on the homepage.
The cryptocurrencies present here are listed by default. You can choose to show only tokenized stocks, only stablecoins, etc.
For each asset, you will have the following three columns:
- Balance: the total value of what you own of a certain token, including your current orders and positions;
Available Balance: the available value of what you actually own, excluding pending orders and positions;
USD Value: cumulative value of your assets in dollars.
To the right of these columns you will find the following options:
- Deposit: allows you to buy a certain asset with your bank card or deposit funds from another platform;
- Withdraw: allows you to withdraw cryptocurrencies to transfer them to another wallet (MetaMask for example);
- Convert: This is a swap function. You can exchange one token for another, for example USDC for FTT;
- Lend: allows you to lend a certain cryptocurrency so that other users can do margin trading;
- Stake: allows you to use the staking function of the FTX platform. For example, you can grow SOL, RAY, SRM or FTT tokens.
Note that you must have level 2 identity verification on FTX to withdraw or deposit funds.
The orders available on FTX and their use
Trading on FTX is divided into two main parts: futures contracts and spot contracts (cash market).
Let’s see what separates them and what is possible to do for each of them.
For this example, let’s click on the BTC/PERP perpetual contract in the “Futures” tab.
The Chart: Here is a chart taken from the TradingView site. You can change the time unit, add different technical tools like Bollinger bands or simpler tools like average price. You can also manually draw resistance or trend bands there;
Order book (orderbook): this tool allows you to see in real time the orders placed by the market makers in order to have an overview of the current supply and demand for a pair of cryptocurrencies;
Buying and selling in real time (market trades): this window allows you to see the buying and selling history of platform users on the chosen pair;
Using Leverage: Allows you to trade with leverage. We will detail this below;
Your buy and sell orders: it is in this window that you will place your buy and sell orders on the chosen pair.
– Limit type order
This order allows you to buy or sell at a price that you determine yourself beforehand. Let’s take the example of BTC, if you put 30,000 USD in the “Price” field then your buy order will be triggered as soon as the Bitcoin reaches the price of 30,000 dollars.
It is a very practical tool which can allow you to define in advance a price which you do not wish to exceed and which thus saves you from having to scrutinize the market.
In the case of a sell order, if you put 70,000 USD in the “Price” field, then you will sell 1 BTC for 70,000 dollars if the market reaches this price one day.
-Market type order
The market order allows you to buy a cryptocurrency based on the lowest possible bid, without taking into consideration the current price of said cryptocurrency.
Let’s stay on the BTC-PERP example: if you fill in the “Amount” field with 1 BTC, then you place an order to buy one Bitcoin at the price of the current lowest bid in the order book.
The execution of this order is instantaneous.
-Stop-loss orders (limit and market) and take profit orders
These orders add an interesting component since they will allow you to choose yourself when your order will be triggered. This is a process similar to the limit type order, except that here your order will only appear in the order book once the trigger price has been reached.
To use it, click on the small calculator at the top right of the window.
In the new screen that appears, stay on “Market” to place yourself in relation to the market, otherwise select “Limit” to manually define where you want to enter.
Fill in the “Take profit exit” field with a value above the market value and then set the stop loss value. The latter must be lower than the current market price.
On the screenshot above, if the BTC/PERP rises until it reaches a value of $38,000, then our order will be placed and we will have about a 4% gain.
If the BTC-PERP goes down and reaches $35,000, then our order will be placed at that time and we will have lost approximately 4.2% from the market price.
Finally, click on “Place order” to confirm your order.
– Trailing Stop type orders
With the trailing stop type order, the trigger price will be placed automatically according to the current market price.
In the current scenario, BTC/PERP is trading at $36,180. We will choose a value of 50 in the “Trail value” field, which means that if the price of BTC-PERP progresses towards 36,230 dollars (50 dollars more than the current price), then our order will be triggered and placed. in the order book. On the other hand, if it drops to $36,130, then the order will be readjusted to the next level.
At the next level, our order will only be triggered if the BTC/PERP goes back to $36,180, and so on.
In the case of a sale, a negative value must be indicated in the “Trail value” field.
It is a very practical tool to open or close a position, but which remains however exposed to the effects of slippage.
Adjust your leverage on FTX
FTX offers two solutions for users who wish to benefit from leverage effects, on the one hand leveraged tokens and on the other hand manual leverages.
Leverage is another way that refers more to debt. In the business world, leverage is often associated with borrowing capital to finance the purchase of equipment and other assets.
Set a lever manually
First of all, it is necessary to understand what is the principle of trading with levers.
This method involves amplifying the initial investment capital by borrowing funds from the platform. For example, if I want to invest 100 dollars with x100 leverage, then the platform allows me to obtain an investment capacity of US$ 10,000.
one could quickly be tempted to imagine easy gains. However, this method is not without risk, since the capacities of losses are proportional to that of gains.
Indeed, if your position ends up being liquidated, then you will have lost your initial investment (US$ 100 with our example) in addition to the necessary collaterals that you will have deposited in your portfolio.
FTX works as follows with the leverage method:
If you have $1,000 as collateral in your current account, then your positions cannot exceed an amount proportional to this base, i.e.:
Leverage x3: $3,000;
Leverage x5: $5000;
Leverage x10: $10,000;
Leverage x20: $20,000.
The FTX platform also offers the possibility of borrowing on the spot market to enlarge your positions via the “Enable spot margin trading” option that you will find in the settings. Be careful though, you are adding risk to the already existing risk.
As of February 2022, FTX offers leverage up to x20. This may not seem like much compared to other platforms that offer x100 or even x200 leverage, but we advise you not to go beyond x3, and above all, invest a reasonable amount of your capital with this method.
The gains can be significant, but the losses can be very heavy, and as such, the leverage method is strongly discouraged for novices.
Use leveraged tokens
FTX also offers ERC-20 tokens with built-in leverage in the “Leveraged Tokens” tab itself located in “Market”.
The tokens are offered as follows:
Let’s take the example of the BULL/USD pair, so with a leverage effect of x3. If the price of bitcoin goes up by 1%, then the BULL/USD will gain 3%. Conversely, if the price of bitcoin falls by 1%, then the BULL/USD will fall by 3%. Concretely, market movements will always be multiplied by 3 on a BULL pair, whether up or down.
The risk of liquidation is reduced on leveraged tokens thanks to the balancing system set up by FTX: every day, at 2 a.m. UTC, the platform will automatically readjust the levers in relation to the initial market price.
Our opinion on FTX
The FTX platform seems to please, as evidenced by its ever-growing valuation, which reached $32 billion in February 2022.
It is significant to note that FTX has played it safe for its users: in July 2021, it decided to lower the maximum leverages to x20 instead of the initial x100. Today, it also offers its users to create sub-accounts on the platform in order to reduce the risks in the event of liquidation.
The platform also has rather low transaction fees compared to the majority of trading platforms, which is not a negligible point. Remember that these rates can be even more attractive if you stake FTT.
The FTX trading platform may be impressive at first glance with its many possibilities, but the diversity of its tools is what makes it unique. It continues to gain ground against competitors in the middle, and could well catch up with the Binance platform in the not-too-distant future.
If you are rather familiar with the world of cryptos, FTX will be able to satisfy you thanks to its spot market options, futures market, but also with its tokenized shares and its integrated leveraged tokens which reduce the risks induced by classics leverage.
Bitcoin and Ether fall after takeover of a cryptocurrency giant
On Tuesday, November 8, 2022, Binance announced its intention to acquire FTX, a famous cryptocurrency management platform. While the latter was worth 32 billion dollars at the start of the year, it was weakened by a series of accusations against it. As usual, the crypto market panicked and caused the price of Bitcoin and Ether to plummet.
2022 will undeniably have been the dark year for cryptocurrencies. Rarely has the sector been so shaken, after its rise in 2021. After the fall of stablecoins in May 2021, the market struggled to recover from the extreme panic that affected all investors. If things seem to have calmed down somewhat, without being resolved, the IMF still considers that the situation is dramatic.
And it’s not about to get better. On Twitter, the hashtag #cryptocrash is currently trending. In question, the surprise announcement of the takeover of FTX by its lifelong rival, Binance. In recent years, the two platforms have established themselves as the essential players in the sector, with their ultra popular asset management solution. But everything changed in a few days for FTX.
FTX unveils its reorganization plan, sparking dissatisfaction with creditors
Cryptocurrency exchange, FTX, is at the center of discussions following the presentation of its plan to categorize creditors and consider a move to an offshore structure.
However, the UCC expresses strong disappointment with this project, highlighting a lack of communication and collaboration. Despite repeated requests, no consultation took place with FTX, pushing the UCC to evoke an alternative plan submitted to the vote of the clients.
Indeed, an association representing some FTX customers expressed strong disappointment with this project. In particular, she deplores a lack of communication and collaboration. FTX’s Official Unsecured Creditors Committee (UCC) is particularly critical.
According to him, despite insistent requests, no real consultation took place with the platform. The UCC even goes so far as to mention the possibility of establishing an alternative plan, which it would submit to the vote of the customers if the dialogue was not re-established.
Photo credit: FTX, source: https://help.ftx.com/hc/en-us/articles/360036096791-Media-Kit, via Wikimedia Commons
Important information: All investments involve some degree of risk. As a general rule, you should only sell and buy or trade financial products that you are familiar with and understand the risks associated with. You should carefully consider your investment experience, financial situation, investment objectives, level of risk tolerance and consult your independent financial advisor regarding the appropriateness of your situation before making any investment.