FTX’s Ongoing Bankruptcy and Recovery Efforts
After the trial of Sam Bankman-Fried in October, FTX’s bankruptcy team continues to work on recovering lost assets and repaying customers affected by the exchange’s downfall.
According to a report from Forbes, FTX plans to sell about $100 million worth of cryptocurrencies each week until all one million creditors are paid back as much as possible.
The SEC might try to interfere with this plan, as they did in the case of Voyager Digital’s bankruptcy, but their intervention failed, and if allowed to proceed, the massive sale is likely to impact the market significantly.
Impact of FTX’s Largest Crypto Holdings
Solana (SOL) is likely to face downward pressure due to FTX holding approximately 10% of its total supply, worth over $3.3 billion, making it the largest cryptocurrency holding of the bankrupt exchange.
FTX’s holdings in Bitcoin (BTC) and Ethereum (ETH) are $742 million and $226 million, respectively, representing approximately 0.1% of their total circulating supply.
Aptos (APT) and XRP are also major cryptocurrencies held by FTX, with about $180 million and $143 million worth, respectively.
Limited Impact on Market Price
Despite concerns about a major firm offloading $100 million worth of cryptocurrency each week, FTX’s sale of Solana had little effect on its price during a recent rally. Similarly, the U.S. government’s sale of 49,000 BTC seized from Silk Road in 2021 and 2022 hardly impacted the market.
The cryptocurrency values mentioned reflect market prices at the time of publication and may change based on the latest available filings detailing FTX’s cryptocurrency holdings.
Hot Take: Future Implications for Cryptocurrency Market
The ongoing bankruptcy proceedings at FTX and its planned weekly sale of cryptocurrencies have raised concerns about potential market impacts. However, historical examples suggest that these sales may have limited effects on cryptocurrency prices. It remains to be seen how regulatory intervention or FTX’s large holdings will influence future market dynamics.
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