Crypto investors express mixed reactions as popular defunct exchange FTX prepares to repay $16 billion to creditors by next quarter.
As investors anticipate FTX’s repayment of $16 billion to creditors in the fourth quarter of 2024, several crypto experts have been deliberating on how this development could impact the market.
For context, FTX is set to repay its creditors $16 billion in cash by November and December 2024. While many pundits expect the move to impact the broader market positively, others think otherwise.
Bearish Case
In particular, pseudonymous trader “Kaz The Shadow” is among those who believe FTX’s upcoming repayment could negatively impact the market.
Kaz noted that if FTX is required to pay its creditors in cash, the bankrupt exchange will likely sell most of its crypto holdings to raise the $16 billion. According to Kaz, this action could trigger a massive collapse in crypto prices amid the large-scale selloff.
The trader stated that even though FTX repays creditors in cryptos, people might sell their assets, causing a similar effect. As a result, Kaz urged investors to exercise caution, indicating that the market might face significant volatility due to FTX’s upcoming repayment.
Bullish Case
However, the research arm of blockchain analytics company Cryptonary recently emphasized that FTX will repay the entire $16 billion in stablecoins.
Even though the research team speculated that most of the funds could be reinvested into cryptos, it suggested that some could be used to acquire Christmas gifts, given the period of the repayments.
$16b in stablecoins will be repaid to FTX users between November and December.
We're estimating most of that to be returned to crypto with some being spent on xmas gifts.
Source: our research team. pic.twitter.com/sZCgbIdQwi
— Cryptonary (@cryptonary) September 2, 2024
Additionally, veteran crypto trader Sensei shares a similar sentiment, suggesting that the upcoming repayment is bullish for the market. He speculated that many FTX creditors will reinvest the cash into cryptos. This move could bolster crypto prices, potentially paving the way for the highly anticipated bull run.
Can FTX Repayment Revitalize the Crypto Market?
Meanwhile, the performance of the broader crypto market, led by Bitcoin (BTC), has been discouraging in recent times.
Specifically, Bitcoin, which soared to an all-time high of $73,750 in March, is currently down 19.65% to $59,180. The premier asset has dropped 5.15% in the last seven days and 4.79% over the past month. Bitcoin’s massive plunge has impacted the broader market, causing a significant crash in crypto prices.
With several market observers expecting FTX creditors to reinvest some funds into crypto assets, like Bitcoin, this influx of capital could revitalize the market.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
