FTX repayments stir mixed feelings among investors, sending Bitcoin and Solana down

출처 Fxstreet
  • FTX is set to redistribute tokens to its creditors starting on Tuesday.
  • The repayments will start with creditors owed $50,000 or less.
  • 10x Research analyst states that the first redistribution may not have much effect on the crypto market.

Bitcoin (BTC) and Solana (SOL) experienced declines on Monday as defunct crypto exchange FTX will begin redistributing tokens owed to creditors from its collapse in 2022, starting with those who held $50,000 or less. The report stirred mixed responses among investors, as some see it as negative for the crypto market.

FTX repayment plans to take effect this week

Defunct crypto exchange FTX is set to initiate its first round of creditor payouts following its collapse in late 2022.

FTX creditors will begin receiving repayments this week as part of the exchange's ongoing bankruptcy resolution.

Crypto investment firm Monolith.vc stated that the official repayment process will begin on Tuesday.

The initial recipients are Convenience Class creditors with claims of $50,000 or less — who will receive full repayment with a 9% annual post-petition interest, according to FTX's restructuring plan.

While some anticipate that this influx of funds could boost market valuations, opinions remain divided. 

"FTX will distribute approximately $1.2 billion to Convenience Class creditors [...] too small to move the needle," Markus Thielen, founder of 10x Research, stated in a client note on Monday.

Although in phases, FTX is expected to refund investors between $14.7 billion and $16.5 billion. Crypto custodian BitGo has been assigned to oversee the fund distributions.

Despite the fast-approaching repayments, many crypto holders have expressed frustration over FTX's decision to anchor its distribution on prices from November 2022.

This has significantly impacted investors who held Bitcoin on the exchange before its collapse. BTC has established several new highs since the collapse in November in 2022, rising nearly 500%. The top crypto is trading below $97,000 at press time.

The redistribution has also sparked speculation around Solana. This follows FTX's plan to unlock 11.2 million SOL — worth $2.06 billion — on March 1, marking one of the largest token releases from its bankruptcy holdings.

The unlock could negatively impact the price of SOL as it declined below $180 in the past 24 hours — potentially fueled by fears of a drawdown by the redistribution plans.

While repayments are moving forward, the decision to use older price valuations remains a major point of contention among creditors.

FTX collapsed after it was exposed for illegally diverting customer funds to Alameda Research, leading to an $8 billion deficit.

Investor panic and mass withdrawals accelerated the exchange's fall in 2022, culminating in FTX’s bankruptcy and fraud charges against its CEO, Sam Bankman-Fried (SBF).

Cryptocurrency prices FAQs

Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.

A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.

Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.

Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.

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