Massive buying pressure is coming in October.
Discover where the money is headed
The FTX bankruptcy estate has recently released its final Disclosure Statement, outlining estimated compensation amounts, key dates, and the recovery plan.
I decided to dive deeper and answer the key questions
Why is that even important?
Who will be receiving compensation, and what are the amounts?
What is the distribution mechanism, and when will the compensation be issued?
What potential market impact should we anticipate?
The recovery plan isn't about refunds in $BTC or $ETH, it's about returning $16 Billion in stables specifically to dedicated crypto investors.
Naturally, a significant portion of this money will flow back into the crypto market, acting as a major catalyst for growth in Q4.
The recovery became possible after FTX reached an agreement with the U.S. government and sold major portions of crypto, company shares and other assets.
The last major sell-off was in May 2024 when FTX sold $2.6 Billion $SOL tokens at a big discount.
According to recent court filings, 98% of FTX customers will be able to receive full repayment within 60 days of a bankruptcy court approval of its wind-down plan.
The deadline for filing a claim was August 16 and the final court approval is set for October 7, 2024.
Claims from all creditors will be segregated into 2 classes
➢ Convenience Class for claims under $50,000:
Recovery: 119% of reconciled claim value
Distribution: within 60 days after the final court approval
➢ Non-Convenience Class for claims over $50,000:
Recovery: 129%-143% of reconciled claim value
Distribution: late 2024 - early 2025
All claims will also get a post-petition interest rate of 9% to compensate for the time value of their frozen funds.
FTX has yet to specify the exchange entity responsible for the distribution but made it clear that the mechanism will involve stablecoins.
Claimers will need to specify their Ethereum wallets and confirm the withdrawal of $USDC.
Once the current plan is approved, clients could start receiving payouts as early as October, providing many with the liquidity to invest in crypto.
The FTX payout event also aligns perfectly with the U.S. elections and other bullish factors, such as global ETF adoption and changes in crypto regulation in China.
The majority of affected FTX clients are retail crypto investors, meaning a significant portion of the recovered stables is likely to flow back into the crypto market.
A big chunk of it will obviously go to $BTC and dominant alts such as $ETH, $SOL and $BNB.
Additionally, FTX creditors are more likely to invest in new or trending coins rather than older alts from the previous cycle.
Here are the narratives and coins I expect to benefit the most
RWA
Real-World Assets (RWAs) are tangible assets that exist outside the digital spectrum, which can be tokenized and brought into the blockchain ecosystem.
➢ Low-cap ($1M-$50M) → $TOKEN, $RWA, $RIO
➢ Mid-cap ($50M-$500M) → $DUSK , $POLYX , $GFI, $ORAI
➢ High-cap ($500M+) → $ONDO, $OM
AI
AI tokens represent the combination of artificial intelligence and blockchain technology.
➢ Low-cap ($1M-$50M) → $ALI, $ DIA
➢ Mid-cap ($50M-$500M) → $IO, $POND, $ATH, $NMR
➢ High-cap ($500M+) → $NEAR, $FET, $RENDER
DePIN
DePIN refers to Decentralized Physical Infrastructure Networks, where blockchain and token rewards are used to build infrastructure in the physical world.
➢ Low-cap ($1M-$50M) → $FLT, $DIMO
➢ Mid-cap ($50M-$500M) → $IOTX, $HONEY, $NOS, $PHA
➢ High-cap ($500M+) → $HNT, $FIL
Memecoins
Memecoins are tokens inspired by internet memes or trends. They usually don't have any tech behind and characterized as highly volatile coins.
➢ Low-cap ($1M-$50M) → $WEN, $DEGEN, $GME
➢ Mid-cap ($50M-$500M) → $CAT, $MEW, $PONKE
➢ High-cap ($500M+) → $WIF, $BONK, $FLOKI
I hope you've found this article helpful.
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