In a significant development for the cryptocurrency industry, FTX, the exchange that collapsed In November 2022, under the leadership of convict Sam Bankman-Fried, it is preparing to distribute a staggering $16 billion in cash to its customers, which could lead to significant gains for the prices of bitcoin (btc) and Solana (SOL).
Cryptocurrency researcher Xremlin has predicted that a considerable portion of this cash will flow back into the cryptocurrency market, serving as a catalyst for growth towards the end of the year.
$16 billion cash injection into FTX
in a x.com/0x_gremlin/status/1809222974672609626″ target=”_blank” rel=”nofollow”>Recent post on social mediaXremlin highlighted the importance of the distribution, emphasizing that it involves returning $16 billion in cash to people already involved in the crypto space.
Xremlin believes that a significant portion of this money will be reinvested into the market, specifically in the purchase of various tokens, including bitcoin and Solana, creating significant buying pressure and price growth for both cryptocurrencies.
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The source of this massive cash injection can be traced back to FTX agreement with US government agencies, where assets acquired with misappropriated client funds were sold. These assets included investments in cryptocurrencies, technology companies, hedge funds, and real estate.
Following the sale of shares in artificial intelligence startup Anthropic, where FTX had previously invested $500 million, the struggling exchange found $6.4 billion in cash. It is important to note that the amount also includes assets controlled by debtors and liquidators.
However, the exchange has faced discontent from some customers over the settlement of customer complaints based on lower cryptocurrency prices since November 2022, when FTX filed for bankruptcy.
For example, customers holding 10 ethereum native tokens, eth, in their accounts will receive approximately $12,000 in cash, significantly less than the asset's current value of around $29,000, as eth is trading at $2,900.
Despite objections, the court approved the creditors' vote. liquidation planAnd if approved with the necessary number of votes, the plan will be implemented after final court approval.
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Key dates to keep in mind for future developments include August 16, 2024, which marks the deadline for FTX Customers must vote on bankruptcy settlement payments, and October 7, 2024, when Judge John Dorsey will consider approving FTX's bankruptcy plan.
If the current plan is approved, customers can expect payouts to begin by the end of Q3, which could provide much-needed liquidity for token purchases. This timing coincides with the US election, which could contribute to further market volatility.
Consequently, FTX payments could serve as an additional factor driving an uptrend in the cryptocurrency market as it finds itself in significant price declines.
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bitcoin has fallen more than 21% over the past month at one end of the market, from a high of $71,000 to a current trading price of $56,400. Meanwhile, Solarium outpaces btc’s losses with a 22% drop in the same time frame, currently trading at $134.
Furthermore, the continued selling pressure from the US and German governments seen over the past month is expected to continue for the rest of the year, and cash injection From FTX to crypto investors, it could help mitigate the expected selling pressure.
The researcher notes that since most of the affected FTX clients are retail crypto investors, a significant portion of the money is expected to flow back into cryptocurrencies. bitcoin, ethereum, and Solana are likely to receive the most liquidity.
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