FTX is finally starting to pay back its creditors – over two years after it went bankrupt! The first payments are going out today, February 18th, to smaller creditors (those owed $50,000 or less). This initial payout totals around $1.2 billion, including interest.
The Payout Breakdown and Market Impact
Larger creditors will have to wait until Q2 2025 for their share of the massive $16 billion payout. The big question is: what will creditors do with their money?
If they reinvest in crypto, it could significantly impact the market. A flood of crypto sales could tank prices, while a buying spree could send them soaring. Most repayments are expected to be in cash, though.
Where Will the Money Go? Bitcoin or Altcoins?
Many believe the money will mostly flow back into Bitcoin, leading to a price rally. After all, Bitcoin has been a popular choice lately. Reddit users are already saying they’ll reinvest their payouts!
However, some analysts, like Excavo, predict a different outcome. They think a large portion of the money could go into altcoins, especially if Ethereum staking ETFs get approved. This could boost underappreciated altcoins like Cardano, Dogecoin, XRP, and Solana. The lack of investment in altcoins recently might make them attractive to investors looking for growth.
The Bottom Line: A Price Prediction?
Billions of dollars entering the market could create a lot of buying pressure, potentially leading to a price surge. But it’s a complex situation. Bitcoin is currently trading around $95,300, slightly down for the day. Whether this massive influx of cash will cause a Bitcoin rally or a broader market shift remains to be seen. It all depends on how creditors choose to reinvest their funds.
