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Cryptocurrency News Articles
FTX Creditors Poised to Receive Over $12B in Payouts, Could Revive Crypto Markets
Oct 10, 2024 at 07:03 am
In the aftermath of FTX collapse, creditors of the defunct crypto exchange are poised to receive over $12 billion in payouts in the coming months.
Following the collapse of FTX, its creditors are set to receive over $12 billion in payouts in the coming months, a move that could breathe new life into the sluggish crypto markets.
At the time of bankruptcy last year, FTX had $12.6 billion available for distribution to creditors — a number that could increase to $16.5 billion as more assets are recovered and sold. Initially, creditors will receive about $1.1 billion in the first round of distributions.
While this is only a fraction of the total amount owed, experts are optimistic that even this smaller distribution could help stabilize cryptocurrencies like Bitcoin.
"It's going to be interesting to see how quickly and to what extent those funds get redeployed into crypto markets," Alex Thorn, head of research at Galaxy Digital Holdings, told Bloomberg.
"Especially in a market where liquidity is a concern, these early repayments could have a positive impact on Bitcoin's price."
Others, like Benjamin Celermajer, co-chief investment officer at Magnet Capital, also highlighted the potential for crypto market recovery.
"Essentially, these payouts are putting money back in the hands of sophisticated crypto traders," Celermajer said.
"Many are expecting a portion of these funds to flow directly into digital assets, providing a price catalyst in a market that has seen very little price movement over the past month."
While the repayments will not occur all at once, there is still optimism about the eventual market impact.
According to Galaxy Digital, payments to smaller FTX creditors could begin by December, while larger creditors are expected to receive their share throughout the first half of next year.
Crypto markets have been uncharacteristically quiet in recent weeks. Bitcoin is up 43% this year but still far from its previous highs, currently trading above $62,400.
With October historically being a strong month for crypto, many traders have been left scratching their heads at the lack of volatility.
"We've seen a limited response from crypto markets to the FTX creditor payout news, despite the potentially large sums involved," a report from research firm K33 noted.
"Based on our analysis, latent demand from FTX creditors could amount to about $2.4 billion. However, the market impact may be soft given that repayments will be made over several months."
As FTX continues the complex process of setting up a trust to handle these distributions, all eyes will be on whether this influx of liquidity can finally reignite the crypto market.
Disclaimer:info@kdj.com
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