Retail investors' enthusiasm for FTX's court-approved bankruptcy filing may be premature, according to a new note from Presto Labs. In it, the analysts question whether the $16 billion in cash paid to lenders will be reinvested in the crypto market as part of the plan.
A U.S. bankruptcy court for the District of Delaware on Monday granted FTX a reorganization plan nearly two years after the exchange's collapse. Under the plan, 98% of FTX lenders receive approximately 119% of their approved claims within 60 days, subject to certain criteria.
The total asset value of the FTX projects will be between $14.7 billion and $16.5 billion. This amount is owed by Chapter 11 debtors, FTX Digital Markets, Ltd. in the Bahamas. It includes assets held by various entities, including FTX Australia's trustees, the US Department of Justice and several private entities.
“It is premature to assume that lenders will directly put that money back into the market. Making such an assumption requires at least some analysis of the claimant mix, which, as far as we know, no one has done publicly,” Presto Labs said.
The researcher pointed out that the payments will start within 60 days after the plan's “effective” date. This timeline indicates that any market impact is inevitable.
Despite the growth, the broader cryptocurrency market showed a slight decline on Tuesday. According to CoinGecko data, during European trading hours, Bitcoin was down 1.9% at $62,300, while Ether was down 2.2% at $2,425.
Speaking to Decrypt, Georgy Slavin-Rudakov, CMO at crypto payment ecosystem B2BINPAY, said the $64,000 plunge was a healthy correction in Bitcoin's price following a significant rally in normal market behavior. ‘
“The end of the year is historically positive for crypto prices as it tends to increase during this period. So the outlook for Q4 remains bullish, I believe it will reach $75,000, driven by broad market optimism and institutional demand,” he said.
Meanwhile, crypto data provider Caico said assets such as Solana (SOL), The Open Network (TON) and Tron (TRX) have more than doubled in value since the FTX crash, while others face significant challenges.
FTX holds excellent positions in certain tokens such as 99% of MAPS tokens, 97% of OXY tokens and 95% of Serum (SRM) tokens. These holdings are particularly difficult to liquidate without causing their value to collapse, Kaiko said.
Edited by Stacy Elliott.
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