Journalist
Posted:
- FTX’s plan was subject to court approval, which could happen as soon as September 13.
- SOL could be one of the biggest casualties in a sell-off.
The crypto market has been buzzing with optimism since Ethereum [ETH] ETF applications filed by Ark Investment and 21 stocks. The bullish development, which also pushed Grayscale Ethereum Trust (ETHE) to its annual highs, fueled expectations of additional investment and liquidity in a market that has been relatively quiet in recent months.
However, an impending bearish event threatened to dampen market participants’ enthusiasm.
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Will FTX Flood the Market with Cryptos?
According to a DeFi analyst, the cryptocurrency exchange FTX has been infected [FTT] could start liquidating its recovered crypto assets in the coming week, which would put significant downward pressure on the market.
Big sales pressure may come next week🚨
FTX is likely to receive approval to liquidate its assets on September 13.
FTX had $3.4 billion in crypto in April. The proposed plan is to sell assets worth up to $200 million per week. pic.twitter.com/4aHnhOVKP1
— The DeFi Investor 🔎 (@TheDeFinvestor) September 9, 2023
The proposed plan was subject to approval by the Delaware Bankruptcy Court, which was expected to hear the case on September 13. If the court grants permission, it would trigger a sell-off cycle at a rate of up to $200 million per week.
According to a hearing on April 12, the bankrupt trading platform had assets worth $4.3 billion in cryptos available for recovery by stakeholders at then market prices. Overall, the exchange has managed to recover assets worth more than $7 billion in liquid cash, cryptos and securities since it went bankrupt in the fall of 2022.
Suffer SOL?
Although the latest data on the composition of the recovered assets was not available, a disclosure in January suggested that the majority of them could be held at Solana. [SOL]. The DeFi analyst predicted that SOL could experience greater sell-off pressure in the coming days.
Realistic or not, here is SOL’s market cap in BTC terms
The development could disappoint the SOL fanbase, who have been celebrating a string of positive stories lately, the most notable of which is a high-stakes deal with payments giant Visa. Data shows that SOL has fallen by 5.84% in the last 24 hours CoinMarketCap revealed.
Solana has been closely tied to FTX’s fortunes and the demise of the exchange had serious consequences for the former.