Last week, bankrupt crypto exchange FTX received permission from the judge to sell its crypto assets. This represents total assets of $3.4 billion. This initially raised some concerns. A lot of money is involved and the sale of the assets could affect the crypto market. However, according to Coinbase, these concerns are unfounded.
FTX owns billions in cryptocurrencies
There is a limit to the number of tokens FTX can sell per week. This represents a total token sale of $50 million. This limit will later be increased to $100 million.
The majority of FTX assets are captured by Solana (SOL): $1.16 billion to be exact. Additionally, FTX has $560 million in Bitcoin (BTC), $192 million in Ethereum (ETH), and $1.46 billion in other altcoins. According to previous reports, the sell limit does not apply to the exchange’s Bitcoin and Ethereum holdings.
Another reason the sell-off won’t be too bad is that the Solana token, which covers the majority of assets, is locked in until 2025. Until then, these tokens cannot be sold or moved. This also applies to other tokens.
Concerns about the crypto dump are unfounded
Galaxy Digital will be responsible for selling the FTX tokens. The proceeds from the sale are expected to be used to pay off numerous creditors.
Last week, the price of Bitcoin fell rapidly after the judge’s decision was announced. However, according to Jeff Dorman of Arca Exchange, this impulsive decline was completely misplaced.
“The way market makers and traders are pushing the supply of FTX tokens shows a complete lack of understanding of how a syndicated sales process works.” This is a court-ordered process that Galaxy Digital will undertake slowly and opportunistically.”
The initial fear that gripped the crypto market therefore appears to be unfounded. Despite the initial price drop following the news, they have now recovered and are higher than before.