News - FTX sells these coins

By Luc Vesters

FTX sells these coins

Solana (SOL)
FTX

Bankruptcy administrators were able to salvage about US$3.4 billion in various cryptocurrencies in the year following FTX's bankruptcy. Following a court ruling in September, they now want to sell them. The goal: compensate customers with the proceeds. Up to 90 percent of the lost money could be returned to its rightful owners. To do this, however, FTX must achieve the "best possible result," as the bankruptcy court points out. In other words, achieve high profits from the sale and ideally without letting the respective cryptos succumb to selling pressure.

It was therefore to be expected that those in charge would wait for a market rally and then sell into strength. As evidenced by on-chain data, that is exactly what seems to have happened when Bitcoin soared to $35,000. Large amounts of different altcoins have apparently moved from FTX wallets to crypto exchanges in recent days. Logically, the strongest altcoins are among the tokens likely to be sold. What are the implications for the respective tokens and the crypto market as a whole? And will more sales follow?

$59 million sales pressure

The blockchain analysis project "Lookonchain" counts crypto tokens worth US$59 million that FTX recently set in motion. A large portion of these, about US$25 million, are Solana tokens (SOL). FTX and its trading firm Alameda Research are big supporters of the ecosystem and have just over US$1 billion in SOL. Last week, they raised at least 5.5 million SOL staked, which therefore will not be sold for the time being.

According to new on-chain data from Spot On Chain, FTX transferred a total of $350 million in crypto to exchanges on Nov. 8. The largest portion of that is Solana (SOL), worth more than $211 million.

In addition to nearly 5,000 ETH (about US$8.7 million), there were apparently several DeFi tokens for sale. These included dydx (DYDX), Uniswap (UNI), Maker (MKR), Lido Finance (LDO) and Aave (AAVE). However, the amounts are still manageable, so the volumes sold should have little effect on the price of the altcoins. Solana's share price also appears unaffected by the moves so far and is above the psychologically important $30 mark at the time of writing.

Will more sales follow?

Surprisingly, there are currently no reports of FTX selling its Bitcoin holdings. And this is despite the fact that the cryptocurrency has reached its highest level since May 2022. If the recent performance continues, it is likely only a matter of time before the trustees sell these coins as well. After all, FTX holds $560 million in BTC. However, price losses from the sale seem unlikely because of Bitcoin's relatively high liquidity and high trading volume. The poor liquidity of the altcoin sector, on the other hand, has led to turmoil in the past on the selling pressure from FTX's holdings.

Mike Novogratz's company, Galaxy Digital, which was tasked with selling the coins, was therefore given the requirement to liquidate up to $200 million in crypto currency per week. A $141 million sale would be possible this week. More could prove an obstacle to the altcoin market's price recovery in the coming weeks. FTX still has plenty of cannon fodder. The wallets tracked by Lookonchain still have $619 million in cryptos. Including $100 million in ETH and $33 million in MATIC.

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