As bankrupt crypto exchange FTX prepares to repay its creditors, analysts predict the distribution of funds will begin a bull cycle in 2025.
FTX’s Chapter 11 reorganization plan will take effect on January 3, with the initial payment expected within the next 60 days. According to some analysts, the move could inject around $16 billion into the market.
Could FTX Refunds Start a Bull Run?
With FTX’s refunds in Q1, billions in fresh capital returning to traders’ hands will likely lead to a surge in investment. FTX has stated that it intends to return 98% of the funds lost by its customers. BitGo and Kraken will provide refunds.
In fact, the crypto market is currently in a neutral phase, with most tokens already facing significant liquidations. This could provide a good entry point for new traders and investors.
FTX to begin repaying $16B to creditors on January 3, 2025. EXPECT SIGNIFICANT LIQUIDITY INJECTIONS. THIS IS VERY POSITIVE FOR BITCOIN!, crypto influencer Daan de Rover wrote.
After more than two years of bankruptcy proceedings, FTX’s repayment plan received approval in October. Under the plan, the first wave of payments will prioritize those with claims under $50,000.
The reimbursement process is structured to address small claims first, with larger reimbursements expected to be completed later in 2025.
At least 50% of the liquidity from the payments is expected to hit the market. Pseudonymous crypto analyst Ash Crypto further stated that the refunds could even trigger an altcoin season.
FTX will start paying out $16 billion in claims starting January 3, 2025. Nearly $12 billion in stablecoins. This will kick off altseason, the analyst said.
Another crypto executive offered the same perspective on X (formerly Twitter).
FTX to begin repaying $16B to creditors on January 3, 2025! Payments expected within 60 days… and guess what? A large portion of that $$$ could go back INTO THE CRYPTO MARKET. The bull run just got fueled. Buckle up, the exec wrote.
However, Sunil Kavuri, an advocate for FTX creditors, dismissed the repayment demands, stating that no payments would be made in January. He also stressed that a $16 billion distribution would not happen.
According to their analysis, FTX currently has around $13 billion in cash reserves. This is expected to increase to $14 billion by March.
Additionally, additional funds from litigation and venture capital investments could add another $5 billion to $7 billion.
Is all hope lost?
Despite confusion over when the funds will be transferred, the market is hoping that FTX's refunds could give bulls an edge next year.
Historically, the cryptocurrency market has seen substantial recoveries following major corrections or significant liquidity inflows. The current market momentum presents an ideal scenario for a bull run, as Bitcoin has already surpassed the $100,000 mark multiple times this year.
FTX filed for bankruptcy in November 2022 following a liquidity crisis and the resignation of founder Sam Bankman-Fried. The bankruptcy case led to multiple charges against executives at FTX and Alameda Research.
Additionally, news of the refund comes as BeInCrypto reported last week that there are concerns about Sam Bankman-Fried getting an early release from prison through Biden's presidential pardon.
Overall, if the $16 billion repayment plan goes ahead as announced, the crypto market will see significant new liquidity. In theory, this should influence a bullish cycle.
Article Will FTX Refunds Have a Crypto Bull Run in 2025? was first seen on BeInCrypto Brasil.
