According to K33 Research experts, scheduled cash payments to FTX creditors may generate a surge of bullish “buying pressure” in the cryptocurrency market.
A minimum of $14.5 billion in cash will be given by FTX to users who lost money as a result of the exchange going bankrupt. According to a May 14 research from K33 analysts Vetle Lunde and Anders Hesleth, these dividends would probably result in a “bullish overhang” for the market.
The analysts contrasted FTX’s anticipated cash repayments with the scheduled cryptocurrency-based repayments from Mt. Gox and Gemini, the latter two of which are “currently valued at $10.6 billion,” to show that not all creditor repayments are bearish.
Lunde and Hesleth came to the conclusion that the selling pressure from in-kind recipients would be offset by the buying pressure from cash users.
The experts stated that the timing of the repayments might play a crucial role in forecasting their impact on the market, despite the fact that it would be “impossible” to estimate the net purchasing or selling pressure from these repayments in advance.
Though most FTX creditors expected repayments to be given later this year, the analysts pointed out that there was still some ambiguity around the planned repayment date because the court had not yet approved the FTX repayment plan.
The disparity in the timing of these repayments is another sign of a sluggish summer for the market and a strong year-end.
Repaying creditors up to $16.3 billion, FTX said on May 8 that those with claim amounts under $50,000 might get up to 118% of the recovery, calculated using the value of their cryptocurrency in November 2022.
Proposal has been met with criticism from certain industry experts who claimed that not all creditors would get repayments at the going rates.
CEO of BitGo Mike Belshe replied to X on May 8: “I understand why the bankruptcy process needs to work this way but let’s not pretend victims are getting their money back.”
