In a recent update in the cryptocurrency world, Tom Dunleavy, a former senior research analyst at Messari, announced on the X platform that FTX, a major cryptocurrency exchange that went bankrupt in November 2022, plans to return $12 billion to $16 billion in cash to its creditors. He mentioned that this substantial amount could significantly impact the buying power in the market.
Earlier, another crypto analyst, Ash Crypto, pointed out concerns about potential negative events like the MT.GOX plunge but emphasized that FTX's repayment plan could drive the crypto market to new heights. Ash highlighted that distributing over $16 billion to creditors is a significant factor that could lead to a market surge.
The planned schedule for this repayment includes:
- August 16: Deadline for FTX customer voting.
- October 7: Judge Dorsey's decision on the plan's approval.
If the plan is approved, creditors could receive their payments between the fourth quarter of 2024 and the first quarter of 2025. This timeline aligns with other potential positive influences like interest rate cuts, new accounting rules from the Financial Accounting Standards Board, and the results of the US election.
The context of FTX's downfall is crucial. Founded in 2019 by Sam Bankman-Fried, FTX quickly became a significant player in the cryptocurrency world through notable acquisitions and endorsements from celebrities. However, in November 2022, a report revealed that Alameda Research, another firm founded by Bankman-Fried, held a large amount of FTX's native token, FTT. This revelation led to a bank run on FTX, causing customers to withdraw billions and leading to a dramatic drop in FTT's price.
Most FTX customers are cryptocurrency enthusiasts, so the influx of $16 billion back into the market is expected to be a major catalyst for price increases. The crypto community is watching closely to see how these developments unfold, hoping for a brighter future amid past uncertainties.
