The struggling FTT token of the bankrupt cryptocurrency exchange FTX showed signs of recovery on Monday ahead of the launch of a $1.2 billion creditor repayment plan.
The native token of the once-third largest crypto exchange, FTT, has been on a downturn since the exchange's collapse in November last year, losing nearly 100% of its value. However, with the upcoming repayments, some experts are speculating whether the token's price could recover to reach $6.
The price of FTT has seen a peak moment on Monday, surging by 8% to trade at $2.28, as per CoinGecko data. This surge comes amid a broader recovery in the cryptocurrency market, with the total crypto market cap rising by 1.2% over the past 24 hours to reach $963.3 billion.
The rising investor demand for the FTT token was also evident in the surging trading volume, which reached $35.24 million, while the open interest on the token had a minor increase of 10% to reach $4.14 million. This indicates a building interest from investors in the upcoming FTX repayments, which are set to begin this month.
According to reports on FTX Payout claims, the first round of repayments will cover $1.2 billion worth of tokens, which will be distributed to creditors with claims below $50,000. These repayments will be carried out from the end of February to the beginning of March, boosting investor confidence in the token.
This $1.2 billion distribution is part of a larger $16 billion payout, which will be paid out over the next five years. The initial FTX payout will begin around Donald Trump's inauguration on January 20. This event has already sparked excitement within the crypto community.
As billions of dollars' worth of crypto assets are re-introduced into the cryptocurrency market, it could have a ripple effect, with rising liquidity impacting the broader market. Some analysts have suggested that this could lead to the bulls gaining dominance and starting a bull run.
