Markets
$14.5 Billion Payout Could Trigger Crypto Market Surge
- K33 Research revealed that FTX’s upcoming repayments to lenders could increase buying pressure and cause strong market performance later in the year.
- However, a section of the crypto communities raises concerns about the overall repayment plans expected based on November 2022 prices.
The crypto market showed in the first few hours of trading a small sign of resurgence, evident in the 3.96% increase in total market value. Fortunately, renowned analysts predict continued growth to mark the beginning of the post-halving recovery. However, inconsistencies in the drivers of these potential market explosions appear to force investors to react conservatively.
At the time of this publication, Bitcoin (BTC) is up 6% in the last 24 hours, Solana is up 12% in the same period and Shiba Inu rose 9%.
Analyzing the overall dynamics and future behavior of the broad market is K33 Research. According to your report, the market could certainly react positively to the failed crypto exchange FTX’s upcoming refund to customers. In the report, K33 analysts Vetle Lunde and Anders Hesleth pointed out that FTX is prepared to distribute a minimum of $14.5 billion in cash to its creditors.
It is important to note that this figure includes assets under the control of the Chapter 11 debtors and those under the control of the “Joint Official Liquidators of FTX Digital Markets, Ltd. Liquidators of FTX Australia, the United States Department of Justice, etc.”
Interestingly, this money could be funneled back into the crypto market, exerting buying pressure on the various assets and offsetting any negative impact from other reimbursement schemes involving crypto.
FTX, Gemini and Mt. Gox Refund to Trigger Bull Run
The CNF-reviewed K33 report also indicates a close comparison between FTX’s cash refunds and crypto in-kind refunds expected to be made by other entities, including Mt.
As found in the research, these lenders receive a combined amount of $10.6 billion in cryptocurrencies from the latter two entities. Gemini, for example, is scheduled to begin payments of US$1.7 billion in early June, while Mt. Gox is expected to begin its US$8.9 billion payments by October 2024.
For FTX, the repayment schedule is still uncertain as it awaits court approval, however, creditors expect to receive their funds by the end of 2024. Based on the anticipated time frame for these repayments, analysts expect a slow summer in the market, followed by a huge price increase coming towards the end of the year.
Analysts expect buying pressure rather than selling pressure
Addressing the selling pressure scenario that typically accompanies crypto-based refunds triggered by settlements by these recipients, analysts explained that cash refunds by FTX could have the opposite effect. This could increase demand and stabilize prices.
Regardless of the position of K33 analysts, some market experts have recently expressed concerns about FTX’s refund proposal. reported by Crypto News Flash. Remember that the exchange announced on May 8 that it could make refunds of up to 16.3 billion dollars. However, only the smallest claimants are eligible to recover more than 100% of their losses based on November 2022 prices.
According to BitGo CEO Mike Belshe, this falls short of adequate compensation.
0% of FTX lenders agree that receiving $16,800 for your Bitcoin is fully compensated. I understand why the bankruptcy process needs to work this way, but let’s not pretend that victims are getting their money back or that FTX wasn’t as horrible as it was.