Could This Boost Crypto Markets? | Airdrop Alert Pro

As bankrupt cryptocurrency exchange FTX prepares to pay off its creditors, analysts predict that capital allocations will kick off a bullish cycle in 2025.

FTX’s Chapter 11 reorganization plan will take effect on January 3, with initial payments expected to be made within the next 60 days. Some analysts said the move could inject about $16 billion into the market.

Can FTX repayment usher in a bull market?

along with Upcoming FTX Repayments Billions of dollars of new capital returned to traders in the first quarter will likely lead to an increase in investment. FTX said it aims to return 98% of clients’ lost funds. Repayments will be made via BitGo and Kraken.

Most notably, the cryptocurrency market is currently in a neutral phase, with most coins already seeing significant liquidations. This may provide a good entry point for new traders and investments.

“FTX begins repaying $16 billion to creditors on January 3, 2025. Expect massive liquidity infusions. This is so bullish for Bitcoin!” Cryptocurrency influencer Daan de Rover Wrote.

FTX’s repayment plan was approved in October after more than two years of bankruptcy proceedings. Under the plan, people with claims under $50,000 will be prioritized in the first wave of payments.

The repayment process is structured to resolve small claims first, with larger reimbursements scheduled for later in 2025.

At least 50% of payment liquidity is expected to flow into the market. Anonymous cryptocurrency analyst Ash Crypto further stated that repayment may even trigger altcoin season.

“FTX will pay $16 billion in claims starting January 3, 2025. Nearly $12 billion in stablecoins. This will kick off alt season,” analyst explain.

Another cryptocurrency executive made the same point on X (formerly Twitter).

“FTX begins paying back $16 billion to creditors on January 3, 2025! Payments are expected within 60 days…guess what? A large portion of it will likely flow back into crypto. The bull market just got fuel. Buckle up, “Executive Officer Wrote.

However, Sunil Kavuri, an advocate FTX Creditorsrejected the request for reimbursement, claiming no payments would be made in January. He also stressed that the $16 billion distribution would not happen.

according to his analyzeFTX currently has approximately $13 billion in cash reserves. It is expected to increase to $14 billion by March.

Additionally, additional funding from litigation and venture capital could add another $5 billion to $7 billion.

Is all hope lost?

While it’s unclear when the funds will be transferred, the market is hoping that FTX’s repayment will give bulls the upper hand next year.

Historically, cryptocurrency markets have experienced significant recoveries following major corrections or large liquidity inflows. The current market momentum provides an ideal environment for a rebound, as Bitcoin has surpassed the $100,000 mark multiple times this year.

FTX application bBankruptcy November 2022, after a liquidity crisis and founder resignation Sam Bankman-Freed. The bankruptcy case resulted in multiple lawsuits against FTX and Alameda Research executives.

Additionally, news of the repayment comes as BeInCrypto reported last week that there Concerns over Sam Bankman-Fried’s early release Released from prison through Biden’s outgoing presidential pardon.

Overall, if the $16 billion repayment plan does go ahead as announced, there will be a flood of new liquidity in the cryptocurrency market. In theory, this should impact the bullish cycle.