Crypto exchange FTX listed tokenized lumber futures last week in response to ballooning prices — and they’re outperforming Bitcoin.
FTX founder and chief exec Sam Bankman-Fried created the platform’s tokenized lumber futures market in under two hours, Bloomberg reported.
Bankman-Fried said he made the move to “prove to [themselves] that [they were] still able to be nimble and responsive on short timescales.”
But US lumber futures have nearly doubled in 2021 — breaching $1,500 for the first time in history. Analysts say:
- The V-shaped stock market recovery stoked lumber prices.
- Home construction and improvements triggered demand (COVID-19 kept folks indoors).
- Lumber prices won’t come down any time soon.
So, FTX rushing to tokenize lumber futures also seems to imply that crypto exchanges are keen to hop into whatever industry will bring in more speculators.
More than tokenized lumber
Tokenized lumber might seem niche, but crypto markets saw similar moves when GameStop was the hottest volatile asset on the market.
Both FTX and Binance listed tokenized GameStop shares earlier this year in an apparent move to capitalize on the sudden popularity.
FTX also operates a silver market for US dollars — no doubt a response to the “silver squeeze” meme tied to the GameStop saga.
In any case, lumber insiders are predicting prices will remain high through the summer.
Building in the US continues to increase post-pandemic and home prices are rising to meet demand.
A Los Angeles area home builder told Protos that frothy lumber markets “doubled the cost for the home I’m working on.”
As for FTX’ tokenized lumber: at press time they trade about a half-percent lower than their open price — a touch above Bitcoin (-1%).
FTX’ tokenized lumber is fairing much better than Dogecoin, which is down about 14%.
FTX has processed about $23 million worth of lumber tokens since their listing last Thursday.
Ethereum is beating all three, up 18%.