Crypto Market Faces $3 Billion Shockwave as FTX Plans to Sell Off Its Tokens
The cryptocurrency market may be facing an impending tremor, as an analytics firm has recently suggested that a potential 3 billion sell-off is looming, rooted in the potential liquidations of FTX’s massive cryptocurrency stack to repay creditors.
A recent court filing has recently revealed that the estate of the once-giant cryptocurrency exchange, which filed for bankruptcy in November after collapsing to a bank run, has disclosed assets totaling approximately $7 billion.
Out of these assets, the exchange’s holdings include $1.16 billion in Solana ($SOL) tokens and $560 million in Bitcoin ($BTC). The documents also detail billions in payments the firm made to senior executives, including founder Sam Bankman-Fried.
The filings reveal the company has secured $1.5 billion in cash, in addition to the $1.1 billion it had on November 11. It holds $3.4 billion in crypto, valued at the end of August. This does not factor in their collection of over 1,300 lesser-known tokens, including MAPS and serum (SRM).
FTX has sought approval from a New York court to liquidate its crypto assets, so that it can repay its creditors in cash, which suggests the market may be at risk of a $3 billion sell-off as it liquidates these assets.
FTX’s liquidation of its digital assets could significantly impact the cryptocurrency market, even amid a series of notable developments in the cryptocurrency space that include the Grayscale Bitcoin Trust (GBTC) recently gaining ground on its quest to become a spot Bitcoin exchange-traded fund (ETF) after a recent legal victory over the U.S. Securities and Exchange Commission (SEC).
Moreover, ARK Invest recently unveiled plans to launch the inaugural spot Ethereum ETF — an initiative designed to amplify investments in Ethereum, the crypto world’s second titan.
Yet, the market’s seeming indifference to such substantial news raises eyebrows, according to IntoTheBlock, as Ethereum’s price hasn’t risen significantly with the ETF filing announcements, for example.
The firm’s report notes that the Grayscale Ethereum Trust (ETHE) us nearing its annual peak, at a time in which Ethereum’s value dropped by over 20% and is being held within a tight range, due to a substantial concentration of investors being breaking even at current price levels.
Ethereum is seeing significant support at the $1,600 mark, as around 5.1 million ETH were purchased around this level. On the other hand, the high $1,600s have also seen an accumulation of 6.5 million ETH, making it act as a resistance point.
Contrary to expectations, the unveiling of a prospective Ethereum spot ETF was not enough to move the market out of this range. Visa’s recent move to start using Solana for settlements, however, did help the cryptocurrency’s price rise for a brief moment.
Featured image via Unsplash.
Source: Read Full Article