Mediaboss Marketing

Sun 07 Jul 2024 5 min of reading by Fenelon L.

The bankruptcy of FTX could have unexpected effects on the crypto market. While the defunct exchange is preparing to redistribute $16 billion to its aggrieved customers, experts are predicting significant buying pressure on Bitcoin and Solana. This massive injection of liquidity could well energize a market that has been in decline for several months.

The distribution planned by FTX represents a considerable windfall for the crypto ecosystem. According to researcher Xremlin, a significant portion of these $16 billion should be reinvested in digital assets. Investors, already familiar with this market, could indeed be tempted to bet on cryptos again.

This massive arrival of liquidity occurs in a bearish market context. Bitcoin has lost more than 20% of its value over the past month, while Solana shows a 22% drop. The injection of new capital could therefore act as a catalyst and restart the bullish dynamic that investors have been eagerly awaiting.

Furthermore, this distribution could counterbalance the selling pressure exerted by the German government. They have indeed carried out significant sales of cryptocurrencies in recent weeks, weighing down prices.

The process of distributing FTX funds is set in a particular context. The key dates to remember are August 16, 2024, the deadline for creditor voting, and October 7, 2024, for the final approval of the liquidation plan.

If the schedule is respected, payments should begin by the end of the third quarter of 2024. This period coincides with the US elections, traditionally synonymous with increased volatility in the financial markets. The influx of liquidity from FTX could thus amplify price movements, particularly for Bitcoin and Solana.

The potential approval of a Solana ETF, following the application by Van Eck and 21Shares at the end of June, could also be an additional volatility factor. However, Gracy Chen, CEO of Bitget, remains cautious:

SOL still has some issues:

Considering these factors, excluding political elements, I think the probability that the application for a SOL ETF will be approved is low. Other tokens, like DOGE and SHIB, have relatively low market capitalizations and face high price volatility and potential market manipulation risks. Therefore, I think it is unlikely that the United States will launch other crypto ETFs in 2024.

In conclusion, the distribution of FTX funds could well mark a turning point for the crypto market. While Bitcoin and Solana are going through a difficult phase, this injection of fresh capital could breathe new life into the sector. Investors remain cautious, however, aware of the inherent volatility of these assets.

Maximize your Cointribune experience with our 'Read to Earn' program! Earn points for each article you read and gain access to exclusive rewards. Sign up now and start accruing benefits.

Passionn par le Bitcoin, j'aime explorer les mandres de la blockchain et des cryptos et je partage mes dcouvertes avec la communaut. Mon rve est de vivre dans un monde o la vie prive et la libert financire sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

See the article here:

The Distribution of $16 Billion in Cash by FTX Could Propel Bitcoin and Solana - Cointribune EN