Court Approves FTX’s Liquidation of $3.6 Billion in Cryptocurrencies
A recent court decision has given the green light for FTX to proceed with the liquidation of $3.6 billion in cryptocurrencies, causing a decline in the market. Following FTX’s downfall and subsequent bankruptcy in November 2022, Galaxy Digital, led by Mike Novogratz, will oversee the sale. Traders are concerned about an oversaturated market and this has influenced discussions surrounding the FTX liquidation.
Full List of Cryptos FTX Will Liquidate
FTX plans to liquidate a diverse array of crypto assets. The full list includes Solana (SOL) worth $1.16 billion, Bitcoin (BTC) worth $560 million, Ethereum (ETH) worth $192 million, Aptos (APT) worth $137 million, Tether (USDT) worth $120 million, Ripple (XRP) worth $119 million, Biconomy Exchange Token (BIT) worth $49 million, Stargate Finance (STG) worth $46 million, Wrapped Bitcoin (WBTC) worth $41 million, and Wrapped Ethereum (WETH) worth $37 million.
This liquidation process will be carried out gradually with weekly blocks of $50 million initially, increasing to $100 million. However, there are stricter guidelines for selling “insider-affiliated” tokens that require a 10-day prior notice to creditors and the US Trustee.
Additionally, FTX plans to explore cryptocurrency hedging contracts starting with Bitcoin and Ethereum.
Impact on Solana and Other Altcoins
The revelation of FTX’s significant Solana holdings has caused a 4% decrease in SOL’s price to $18.50 in the past week. FTX’s holdings make up nearly 16% of the total Solana circulating supply. To minimize the asset’s immediate market impact, FTX will release only $9.2 million worth of Solana tokens each month.
While FTX and Alameda Research’s combined Bitcoin holdings of $353 million account for about 1% of Bitcoin’s weekly trading volume, the holdings in less liquid tokens like Dogecoin (DOGE), TRON, and Polygon (MATIC) raise concerns. These assets represent a significant portion of the weekly trading volumes for these cryptocurrencies.
Crypto Market Reaction to FTX News
Upon the news release, Bitcoin experienced a slight dip, losing 0.9% of its value. Ethereum dropped by 1%, while Solana suffered a more significant decline of 2.2%. However, much of this impact had already been factored in due to prior news earlier in the week.
Currently, FTX holds over $3.4 billion in digital assets, a venture investment portfolio valued at approximately $4.5 billion, $200 million in Bahamian luxury real estate, and $529 million in securities.
Hot Take: The Future of FTX and Its Impact on the Crypto Market
The court’s approval for FTX’s liquidation marks a crucial turning point for the company and the wider crypto market. With billions of dollars’ worth of cryptocurrencies set to be sold off, there is concern about how this will affect prices and investor sentiment. The gradual approach to liquidation aims to mitigate immediate market impact, but the influence on altcoins like Solana remains uncertain. As traders and investors closely monitor these developments, it is clear that FTX’s downfall has far-reaching implications for the crypto industry as a whole.
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