FTX Payouts Begin Today, Will Bitcoin Price Rally Or Crash In Response?
The long-awaited FTX creditor expenditure is Scheduled to start today On February 18, after more than two years of bankruptcy. This payment is the first to target smaller creditors. Still, spending may have some impact on the cryptocurrency industry, especially if creditors get payments in cryptocurrency.
Crypto Analyst Excavo has Share his views On TradingView, potential liquidity transfers that may follow FTX creditor spending and the broader impact on Bitcoin and Altcoins are highlighted.
FTX spending kickoff: How does this affect the crypto market?
FTX has confirmed that creditor repayments will begin on February 18, starting with creditors of convenience-grade creditors with claims of $50,000 or less. Since November 2022, these creditors will receive full repayments and receive an additional 9% annual interest, totaling approximately $1.2 billion in expenditures.
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For creditors with larger claims exceeding $50,000, distribution will begin in the second quarter of 2025, with FTX planning to place $7 billion as part of it. A total of $16 billion was paid. As Note by Excavothese expenditures are more important than individual investors, because the reallocation of these funds can reshape the entire cryptocurrency market.
If creditors get spending in cryptocurrencies and decide to sell, it could create downward pressure in the market. However, most repayments are expected to be cash, and now you can see how investors will reinvest them into the market. The first idea is that most of these repayments will return to Bitcoin, which will trigger a Bitcoin price rally.
But with billions of dollars entering the market, a large portion Can flow into altcoinsespecially if Ethereum stacking ETFs get regulatory approval later in 2025. This is as much as it is supposed that Altcoin ETF waves can Bring capital into other altcoins Like Cardano, Dogecoin, XRP and most especially Solana. Excavo’s analysis points out that the lack of liquidity spins to Altcoins has made many people valued, but things could change if most FTX repayments are redirected to the wider crypto market rather than Bitcoin.
Will Bitcoin crash or rally when responding to FTX repayments?
this Total FTX repayment Creditors are expected to exceed $16 billion, mostly in cash repayments. If reinvest in the market, injecting billions of dollars could create new buying pressure. You might argue that this is a general consensus among bullish investors.
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For example, some members of the Reddit Crypto community point to their eagerness to reinvest FTX spending into the cryptocurrency industry. “All of this goes straight back to cryptocurrency.” A reddit user comment.
and Bitcoin is at the forefront Recent inflows into the market, most of the expenditure It can also be easily returned Enter Bitcoin. Crypto analyst Excavo otherwise pointed out that most FTX repayments flowing back to resources will enter the Altcoin market.
At the time of writing, Bitcoin is trading at $95,300, down 0.75% in the past 24 hours.
Featured images from Unsplash, charts from TradingView.com
