FTX Creditor Payouts Could Help Bitcoin

The current FTX bankruptcy events may improve Bitcoin (BTC) prices, according to K33 Research.

FTX Creditor Payouts Could Help Bitcoin

K33 analysts believe recent FTX estate creditor payback events might help the top digital asset retain its positive price trend in Q4 2024.

Bitcoin fell last week due to rising Middle East geopolitical tensions and improved US employment statistics. The flagship cryptocurrency fell from $65,920 on September 28 to $60,200 on October 3, recovering over the weekend.

Judge John Dorsey in the US Bankruptcy Court for the District of Delaware authorized the highly anticipated FTX restructuring plan on October 7, targeting creditor repayments almost two years after the Bahamas-based crypto exchange collapsed.

Nearly 94% of “dotcom customer entitlement claims” creditors supported the restructuring proposal. Only Sunil Kavuri, a spokesman of the main FTX creditor group, criticized the idea.

Kavuri demanded that the estate pay digital assets in kind rather than dollars when FTX declared bankruptcy in November 2022.

In their analysis, K33 analysts Vetle Lunde and David Zimmerman predict creditor payments to begin in late Q4 2024 and continue until early Q1 2025. After the court's effective date, disbursements will occur within 60 days. Unknown date, but likely mid-November. Report notes:

Debtors have 60 days to reimburse consumers with claims under $50,000, totaling $1.2 billion. Larger creditors (entitlement class) should collect $9 billion in February 2025.

Bulls Watch Coming Crypto Funds
Bitcoin bulls may concentrate on payout funds that might re-enter the crypto market. A large portion of digital assets have been converted to fiat, lowering estate plan sell-side pressure.

According to experts, 25% of the $14.4 billion to $16.3 billion in claims, or $3.9 billion, has been acquired by credit funds and is unlikely to re-enter the market.

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