With the implosion of FTX in 2022 and the subsequent bankruptcy proceedings, the crypto market is anticipating a possible sell-off. The Delaware bankruptcy court is expected to rule on September 13 on the $3.4 billion asset sale, which FTX lawyers are seeking approval for.
Crypto markets are already in a downward trend on the back of the expected sell-off. SOL, BTC, ETH, APT, DOGE, TRX, and MATIC are the largest holdings in question, according to the data analytics platform Messari on September 11. But more important than plain dollar value is liquidity, as Messari explains:
“For example, FTX/Alameda’s BTC holdings ($353M) is roughly 1% of BTC’s weekly traded volume, meaning the market can absorb much of the selling, and the same goes for ETH.”
Source: Messari
SOL is not the only token in strife
Notably, DOGE, TRX, and MATIC, on the other hand, are far less liquid. As per Messari, the $20- $30 million in FTX accounts make up a staggering 6-12% of the weekly trading volumes for these assets. The potential price shock for these three assets far outweighs that of BTC, ETH, and SOL.
At the time of writing, SOL is trading at $27.97, down almost 7% in the past week, based on data from CoinMarketCap. SOL had initially dipped down to $27.15 but has since recovered some of its losses.
The filing regarding the token sale was made on August 24, and it would involve Mike Novogratz’s asset management firm, Galaxy Digital, to manage the holdings. The proposed schedule could see $100 million worth of crypto released initially, which could increase to $200 million a week.
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