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Significant capital set to flow into crypto market soon

Significant capital set to flow into crypto market soon

GrafaGrafa2024/10/10 03:45
By:Mahathir Bayena

A significant influx of capital is expected to enter the crypto market in the coming months, with over $6.8 billion set to be distributed to FTX (CRYPTO:FTT) creditors. 

This follows the court-approved repayment plan designed to gradually return liquidity to the market. 

The bankrupt exchange has confirmed that an initial $1.1 billion will be paid out, with the total expected to rise as more assets are liquidated.

FTX plans to refund approximately $12.6 billion to its customers, with the figure projected to reach $16.5 billion as the liquidation process continues. 

These repayments could offer crucial support to the crypto market, especially for Bitcoin (CRYPTO:BTC), which is currently valued at $60,878.48.

Alex Thorn, Head of Research at Galaxy Digital Holdings, pointed out that the repayments could restore liquidity to the market, potentially triggering price movements in major cryptocurrencies. 

This gradual reintroduction of funds is expected to prevent sudden market disruptions while providing a steady boost to market activity.

The payment process is expected to unfold over the next three years, ensuring a controlled release of funds. 

According to research firm K33, demand from FTX’s reinvestors could amount to around $2.4 billion. 

However, the impact on the broader crypto market may be limited due to the staggered nature of the repayments, which are expected to extend throughout the next year.

Benjamin Celermajer commented, "Some of this flow returning to crypto could provide a price catalyst for illiquid markets."

While immediate market shifts are not anticipated, the gradual influx of capital is expected to stabilise and potentially increase market valuations in the coming months, as the total distribution is set to reach $6.8 billion.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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