According to A a report By cryptocurrency research firm K33 Research Bitcoin (BTC) price could benefit from the latest developments in the FTX bankruptcy saga.
FTX payouts could be bullish for Bitcoin
Analysts at K33 note that recent developments in FTX’s mortgage repayment process could help the leading digital asset maintain its bullish price momentum in Q4 2024.
last week, Escalation Geopolitical tensions in the Middle East and stronger-than-expected US jobs data led to a slight decline in Bitcoin. The flagship cryptocurrency fell from $65,920 on September 28 to $60,200 on October 3, before recouping some losses over the weekend.
On October 7, Judge John Dorsey in the US Bankruptcy Court for the District of Delaware approved this decision Very predictable FTX’s reorganization plan, which seeks to begin repaying creditors nearly two years after the Bahamas cryptocurrency exchange collapsed.
Notably, approximately 94% of creditors are in the “dot-com customer maturity claims” category. Vote In favor of the reorganization plan. The only major critic of the plan was Sunil Kavori – a representative of the largest creditor group FTX.
Kafouri called on the company to pay digital assets in kind, rather than their corresponding dollar value, when FTX filed for bankruptcy in November 2022.
In the report, K33 analysts Vetle Lunde and David Zimmerman expect creditor payments to begin distribution in the latter half of Q4 2024 and continue through early Q1 2025. These payments will occur within 60 days of the court effective date. While the date is unknown, it is expected to be sometime in mid-November. The report indicates:
Debtors will have 60 days to pay individual customers with claims of less than $50,000, representing approximately $1.2 billion in assets. Senior creditors (maturity category) are expected to receive their payments of $9 billion in February 2025.
Bulls are watching money entering the cryptocurrency market
Bitcoin bulls are likely to focus on the amount of payment funds that are likely to return to the cryptocurrency market. Notably, a significant portion of the digital assets have already been converted into fiat currencies, reducing potential sell-side pressures from the estate plan.
Analysts assume that of the $14.4 billion to $16.3 billion in claims, approximately 25% – or $3.9 billion – have already been purchased by credit funds and are unlikely to return to the market.
Additionally, 33% of the remaining claims belong to a subset of sanctioned countries, insiders and entities without KYC verification. These assets are unlikely to be claimed.
After taking these factors into account, 20% to 40% – or approximately $2.4 billion – of the remaining $8 billion could return to the markets since “FTX’s trader base is comprised of aggressive risk-takers who are crypto natives.” .
The report further emphasizes that this capital is likely to enter the markets in multiple waves throughout 2025, which will have a relatively minor impact on the overall cryptocurrency market. Bitcoin is trading at $62,793 at press time, down 1.1% over the past 24 hours.
Featured image from Unsplash.com, charts from K33 and TradingView.com
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