‘FTX specter’ haunts the market with a possible settlement of R$16.7 billion in cryptocurrencies

In the recovery process, bankrupt broker FTX is about to liquidate R$16.7 billion (US$3.4 billion) in various cryptocurrencies, which could influence the slight market decline early this week.

According to a document published this Monday (11), most of this amount is in Solana (SOL), which amounts to R$5.74 billion (US$1.16 billion). Next, the two largest cryptocurrencies appear on the market, Bitcoin and Ethereum, with R$2.76 billion (US$560 million) and R$948 million (US$192 million) respectively.

Moreover, the upcoming sale of another R$5.1 billion worth of Bitcoin by the US government is yet another event that could ruin the charts. The same is happening with Mount Gox’s R$17.1 billion worth of Bitcoin, which will be released to its former users next month.

FTX is about to sell R$16.7 billion worth of cryptocurrencies

The main mission of the new FTX directors is to pay all creditors of the bankrupt brokerage that went bankrupt in November 2022. Moreover, the plan looks so good that there is even a possibility that FTX will reopen its doors.

Part of this strategy involves liquidating cryptocurrencies and other assets that did not belong to customers but were part of the company’s investments.

The amounts of cryptocurrencies reach R$16.7 billion, and 72% of this value comes from just 10 assets. The remaining 28% represents more than 400 different cryptocurrencies. The document can be found on Kroll’s website.

FTX cryptocurrencies that may be liquidated under a restructuring plan.  Source: Reproduction.
FTX cryptocurrencies that may be liquidated under a restructuring plan. Source: Reproduction.

Since Solana (SOL) has a market cap of $7.32 billion, the $1.16 billion held by FTX represents about 16% of all SOLs in circulation. With the news of the upcoming sale, SOL fell about 10% in the last 24 hours.

Next come Bitcoin and Ethereum. Although the amounts are not as worrying as in the case of Solana, because these two cryptocurrencies are much larger, the market reacted negatively to the news.

Bitcoin is down 3% this Monday (11), trading at US$25,100. Ethereum losses reach 4%, quoted at US$1,560.

Other assets mentioned in the document are in funds such as Grayscale, which also points to a risk of high indirect selling pressure. The same is happening with the company’s venture capital portfolio, which stands at $4.5 billion.

Part of the FTX portfolio.  Source: Reproduction
Part of the FTX portfolio. Source: Reproduction

The new management of the bankrupt cryptocurrency brokerage also listed 38 luxury properties, located in the Bahamas, worth around R$1 billion.

FTX real estate in the Bahamas.  Source: Reproduction.
FTX real estate in the Bahamas. Source: Reproduction.

Therefore, it is possible that FTX can raise the amount needed to pay all its injured customers by liquidating these and other assets. However, not only could this have a negative impact on the market, but it is already having negative consequences.

Investors are eyeing other huge sales

In addition to FTX, two other “ghosts” may be of concern to Bitcoin investors. The first of these concerns a large amount of Bitcoin seized by the US in the Silk Road case.

In March, the US government confirmed the sale of 9,861 bitcoins (R$ 1 billion at the time), promising to settle another 41,490 BTC (R$ 5.1 billion) in 2023. For comparison, the sum is about 4 times larger than that of bitcoins. owned by FTX.

The other ghost is that of Mount Gox. The broker was hacked in 2014, became insolvent and went bankrupt, also promising to reward those affected by its failure.

According to the latest information, Mount Gox has approximately 138,000 bitcoins (R$17.1 billion) ready to be distributed to its former customers. The distribution date starts next month, on October 31st.

Finally, these sales alone are causing major stress on the market. Added together, they could create enormous selling and psychological pressure never before seen in Bitcoin history.

Source: Live Coins