FTX Collapse Point of No Return Traced to Single Tweet
New data from risk-modeling firm Gauntlet reveals that a single tweet from Caroline Ellison triggers the irreversible collapse of FTX's FTT token. The sell pressure spikes to unprecedented levels, wiping out market liquidity almost instantly.
Data from risk-modeling firm Gauntlet shows that a single tweet from Caroline Ellison marks the exact point of no return for Sam Bankman-Fried's crypto empire. While widespread mismanagement and the use of exchange funds to prop up Alameda Research cause the foundational damage, the immediate market death spiral begins the moment Ellison publicly offers to buy FTT tokens from Binance chief Changpeng Zhao at a below-market price.
Gauntlet calculates the ratio of buy orders versus sell orders for FTT across major exchanges to track this critical moment. Right after Ellison posts her tweet at 11:03 a.m. Eastern Standard Time on Nov. 6, this ratio plummets to below negative 200%, meaning there are roughly four sell orders for every single buy order. This massive imbalance indicates that market liquidity evaporates in an asset that FTX values at around $5 billion just a week prior.
This extreme sell pressure persists for more than seven hours and triggers a cascade of margin calls and liquidations for Alameda based on its exposed balance sheet. Gauntlet CEO Tarun Chitra notes that market conditions across centralized exchanges degrade materially against FTT immediately following the tweet, proving that this specific social media intervention backfires and accelerates the final downfall of the exchange.