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It’s now been three years since the FTX crypto exchange collapsed in 2022, taking billions of dollars in investor and creditor deposits down with it. Over the last few years, the bankruptcy proceedings have drawn to a close, and creditors have been given a repayment plan. Now, with repayments already started, another tranche of billion-dollar repayments is expected to be disbursed to creditors, and this is something that could have an impact on the market.
Why FTX Crypto Disbursements Could Have An Impact
Crypto analyst Axel took to X (formerly Twitter) to reveal an important development coming for the crypto market. This time, it is the fact that the FTX crypto exchange is about to process $5 billion in payouts back to creditors at the end of the month. More importantly, these payments are to be made in stablecoins.
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The significance of this is the fact that, unlike previous disbursements, the stablecoin payments make it so that there is nothing to dump on the market. It’s either this money rotates back into the market. However, a pump would depend on the narrative of where these funds would end up once distributed.
The distributions are expected to go out on May 30, which could put a lot of buying pressure on the market. As the crypto analyst explains, the timing of this distribution could not be better. The reason for this is that the Bitcoin price is still hovering close to all-time highs, and the Ethereum price is still on the rise.
With the $5 billion being distributed, the crypto analyst does not expect that investors would leave the funds just sitting idly in their wallets. Additionally, they are not just going to withdraw their funds and leave. This is because these are investors who are already used to the market. So it is likely that they would end up reinvesting in the market.
“Most of them stayed in crypto despite the FTX blowup, now they’re getting their bags back, and they’re gonna rotate that liquidity back into the market,” Axel explained. If these investors do end up back in the market, then it is expected to trigger a rally in the market.
The crypto analyst also revealed targets for the market if this rotation occurs. For the Bitcoin price, expectations are that this influx of liquidity will push the leading cryptocurrency above $120,000. This rise is expected to trigger the next altcoin season. “Eyes on May 30,” the crypto analyst said. “Feels like the start of the next leg.”
Featured image from Dall.E, chart from TradingView.com
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