At a critical moment in the world of cryptocurrency, FTX is set to return up to $22 billion to customers. This development could have a significant impact on the price of Bitcoin (BTC) and Solana (SOL), potentially leading to a significant increase in their value.
Cryptocurrency analyst Xremlin stated that this massive cash payout could reinject most of the funds back into the cryptocurrency market, acting as a catalyst for growth this year. FTX will distribute $16 billion in cash to observant cryptocurrency traders.
In the fourth quarter, we will see the pressure of billions of dollars in purchases coming. Have you turned bearish today? Think again. Read on to find out where the cash is going. pic.twitter.com/KpNTWQcswT – Xremlin (@0x_gremlin) July 5, 2024
Xremlin recently emphasized the importance of the upcoming distribution, noting that it will involve returning $16 billion in cash to those who are already part of the cryptocurrency ecosystem. The analyst expects a large portion of this fund to be reinvested in the market, especially targeting various tokens, primarily Bitcoin and Solana. The influx of this fund could generate significant buying pressure, potentially driving up the prices of these cryptocurrencies.
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The Origin of the $16 Billion Cash Injection
This massive cash injection stems from a settlement between FTX and U.S. government agencies. As part of the settlement agreement, assets purchased with misappropriated customer funds were sold. These assets include cryptocurrencies, tech companies, venture capital funds, and real estate shares.
FTX previously invested in shares of the AI startup Anthropic with $5 billion, which in distress garnered $6.4 billion in available cash. This figure also includes assets managed by debtors and liquidators.
However, some customer grievances are that customer claims are settled based on cryptocurrency prices starting in October 2022 when FTX declared bankruptcy. For example, a customer with 10 ETH in their account will receive around $12,000 in cash, significantly lower than the current value of around $30,000, as ETH traded at around $3,000 on June 6, 2024.
Despite these complaints, the court continues to advance plans for creditors to vote on the liquidation strategy. If the plan receives enough votes, it will receive final approval from the court.
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Could Purchases of Bitcoin, Ethereum, and Solana Skyrocket?
Key dates to watch include July 16, 2024 (by which FTX customers must vote on the bankruptcy liquidation plan) and September 7, 2024 (when Judge John Dorsey will make a ruling on the approval of the bankruptcy liquidation plan).
If the proposed plan is approved, the distribution of funds to customers is expected to begin at the end of the third quarter of 2024, potentially injecting liquidity into the token purchase market. This schedule also coincides with the U.S. election, which could lead to increased market volatility.
