Colossal Buying Pressure For Bitcoin And Solana As FTX Plans $16B Distribution, Expert
July 05 2024 - 11:00PM
NEWSBTC
In a significant development for the cryptocurrency industry, FTX,
the exchange that collapsed in November 2022 under the leadership
of convicted Sam Bankman-Fried, is preparing to distribute a
staggering $16 billion in cash to its customers, which could lead
to significant gains for Bitcoin (BTC) and Solana (SOL)
prices. Crypto researcher Xremlin has predicted that a
considerable portion of this cash will flow back into the crypto
market, serving as a catalyst for growth towards the end of the
year. FTX $16 Billion Cash Injection In a recent social
media post, Xremlin highlighted the significance of the
distribution, emphasizing that it involves returning $16 billion in
cash to individuals already involved in the crypto space.
Xremlin believes that a significant portion of this money will be
reinvested in the market, specifically in purchasing various
tokens, including Bitcoin and Solana, creating significant buying
pressure and price growth for both cryptocurrencies. Related
Reading: Is This Bad For Solana? $180 Million Transfer Raises
Eyebrows The source of this massive cash injection can be traced
back to FTX’s agreement with US government agencies, where assets
acquired with misappropriated customer funds were sold. These
assets encompassed investments in cryptocurrencies, tech companies,
venture funds, and real estate. Following the sale of shares
in AI startup Anthropic, where FTX had previously invested $500
million, the distressed exchange found $6.4 billion in cash. It is
important to note that the amount also includes assets controlled
by debtors and liquidators. However, the distribution has faced
dissatisfaction among some clients due to settling customer claims
based on lower cryptocurrency prices from November 2022, when FTX
filed for bankruptcy. For instance, clients holding 10
Ethereum’s native token ETH in their accounts will receive
approximately $12,000 in cash, significantly lower than the asset’s
current worth of around $29,000 as ETH trades at $2,900.
Despite objections, the court has approved creditor voting on the
liquidation plan, and if passed by the necessary number of votes,
the plan will be implemented after final court approval. Buying
Frenzy For Bitcoin, Ethereum, And Solana? Key dates to watch for
further developments include August 16, 2024, which marks the
deadline for FTX customers to vote on the bankruptcy wind-down
payments, and October 7, 2024, when Judge John Dorsey will consider
approving the FTX bankruptcy plan. If the current plan is approved,
clients can expect payouts to begin by the end of Q3, potentially
providing much-needed liquidity for token purchases. This timing
coincides with the US elections, which could contribute to
increased market volatility. Consequently, FTX payouts could
serve as an additional factor fueling a bullish trend in the crypto
market as it finds itself in significant price declines. Related
Reading: Dogecoin Decimated: $5 Million Liquidation Sparks 14%
Price Plunge Bitcoin has fallen over 21% in the past month at one
end of the market, from a high of $71,000 to a current trading
price of $56,400. Meanwhile, Solana surpasses BTC’s losses with a
22% drop in the same time frame, currently trading at $134.
Furthermore, it is expected that the ongoing selling pressure from
the US and German governments witnessed over the past month could
continue for the rest of the year, and the cash injection from FTX
to crypto investors could help mitigate the expected selling
pressure. The researcher points out that since most affected FTX
customers are retail crypto investors, a significant portion of the
money is expected to flow back into cryptocurrencies. Bitcoin,
Ethereum, and Solana are likely to receive the most
liquidity. Featured image from DALL-E, chart from
TradingView.com
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