In a significant development for the cryptocurrency market, the defunct FTX exchange is gearing up to distribute $16 billion to its affected customers. This move comes as a part of the exchange’s bankruptcy proceedings, aiming to compensate those who suffered losses during its collapse.
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Anticipated Market Impact
Experts in the field are predicting a substantial increase in buying activity for both Bitcoin and Solana as a result of this distribution. The influx of liquidity is expected to act as a catalyst, potentially revitalizing a market that has been in a prolonged period of decline. Bitcoin has seen a drop of over 20% in the past month, while Solana has experienced a 22% decrease, as reported by Cointribune. This new capital injection could help reverse these trends and spark a bullish momentum.
Why Bitcoin and Solana?
Bitcoin and Solana are likely to benefit the most from this distribution due to their established presence and investor confidence in these assets. Bitcoin, being the most recognized cryptocurrency, often serves as a barometer for the entire market. Solana, on the other hand, has been gaining traction due to its high transaction speeds and lower costs, despite facing some network stability issues.
Timing and Volatility
The distribution process is set against a backdrop of significant market events. Key dates include August 16, 2024, for creditor voting, and October 7, 2024, for the final approval of the liquidation plan. If the schedule is adhered to, payments could begin by the end of the third quarter of 2024. This period coincides with the US elections, which traditionally bring increased volatility to financial markets. The influx of liquidity from FTX could amplify price movements, particularly for Bitcoin and Solana.
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