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However, the exchange recently received clearance from a bankruptcy judge to liquidate its assets to repay creditors. Let’s discover more about this news.
FTX’s Portfolio Will be Liquidaded?
In context, FTX has assets worth about $7 billion, including about $3.4 billion in cryptocurrencies including bitcoin, Ethereum, , and XRP. Here’s a breakdown of FTX’s assets:
- SOL token: $1.16 billion worth.
- $120 million in Tether’s USDT.
- $560 million in bitcoin.
- $119 million in Ripple’s XRP.
- $192 million in Ethereum.
With FTX set to liquidate these assets to pay back creditors, the biggest concerns lie with SOL enthusiasts. Many believe the next step in FTX’s bankruptcy proceedings could hurt SOL’s price. Significant token sales are also referred to as “dumps.” These sales can have a major impact on the developing crypto market. But what’s the true state of the Solana situation?
What Experts Think About Selling SOL
Crypto expert Aaron Arnold recently explained how FTX’s sale of these assets can affect the market. Arnold described the move to repay creditors as positive. However, he noted that the price of some of these assets can suffer heavily.
Holds $560,000,000 in #Bitcoin and $1,162,000,000 in , court documents reveal. pic.twitter.com/7JpjZLVo4m
— Altcoin Daily (@AltcoinDailyio) September 13, 2023
According to Arnold, “Bitcoin and Ethereum have high enough market caps; it’s not great when things get sold, but probably it won’t affect the market too much. XRP, Solana might get affected a little bit more, particularly because roughly 16% of Solana’s circulating supply is held by FTX. Sam Bankman-Fried was a big Solana bull.”
FTX’s bankruptcy procedures are being closely watched by many people, including those outside our industry. It is important to note that the crypto market is unlikely to experience any further setbacks than those already brought on by FTX’s collapse.
FTX will only be allowed to sell off its assets in a number of weekly batches. The first week has a cap of $50 million, and later on, a $100 million cap. The sale won’t happen all at once. It appears that rumors of a “token dump” could be exaggerated.
According to CoinGecko, has had a 4.72% price increase in the past 7 days.
FTX gets approval to sell $3.4B in #Crypto assets & CPI data comes in worse than expected
Markets aren't falling down that much, and not much should be happening from it.
The Solana, which corresponds to $1.2 billion of the assets of FTX, is mostly staked and can't be sold.??… pic.twitter.com/uKG9XefCzy
— Michael van de Poppe (@CryptoMichNL) September 13, 2023
What’s the Background Story?
FTX was one of the top crypto exchanges and derivative platforms before its fall. The exchange suffered a bank run in November 2022. Interestingly, the bank run was sparked by a tweet sent by BINANCE CEO Changpeng Zhao. Zhao tweeted that Binance would liquidate its FTT assets. This tweet led users to rush to withdraw their tokens. As a result, FTX filed for bankruptcy, and Sam Bankman Fried resigned as CEO.
