Analyst Anticipates Bullish Surge as FTX Refunds 16 Billion into Crypto Markets
FTX, the bankrupt crypto exchange, is set to refund $16 billion to its customers, which is expected to have a positive impact on the crypto markets. The refund plan will provide 118% payouts within 60 days for claims under $50,000. Analyst Chain Mind predicts that this influx of funds from the FTX refund will lead to substantial growth in the crypto market.
The refund plan announced by FTX, which filed for bankruptcy in 2022, will see $16 billion in cash returned to its users. This significant amount of money is anticipated to re-enter the cryptocurrency market and potentially drive significant growth.
Chain Mind, a prominent on-chain crypto analyst, believes that the cash influx will not only result in the return of Bitcoin and Ethereum but also inject fresh capital into the market. The reinvestment triggered by this refund could lead to substantial growth.
FTX’s attorney has confirmed that the company reached an agreement with the U.S. government and has sold off assets, including investments in cryptocurrency, tech companies, venture funds, and real estate. While some clients have expressed dissatisfaction with receiving refunds based on crypto prices at the time of FTX’s bankruptcy, the refund plan is almost certain to be accepted.
The current FTX refund plan categorizes users into different classes based on their claims. Claims under $50,000 will receive 118% payouts within 60 days after the plan is activated, while larger claims over $50,000 will receive payouts between 127-142%, with the initial distribution expected by the end of the year.
Key dates to watch for the FTX refund plan are August 16, 2024, for the voting deadline for FTX customers, and October 27, 2024, for the approval of the plan. The plan also includes waiving client priority actions and accruing 9% interest on client claims to compensate for the time value of their funds. However, international holders will face a 30% withholding tax on distributions.
The primary beneficiaries of this compensation are expected to be regular retail traders who will likely reinvest actively in the crypto market. Chain Mind predicts that the liquidity will initially flow into less risky, long-term investments such as Bitcoin, Ethereum, and Solana. As time goes on, investments may diversify into altcoins associated with popular narratives of this cycle, such as RWA, AI, DePin, GameFi, and Meme coins.
Interestingly, the approval and distribution of these payouts align with the end of the U.S. elections. With Donald Trump leading in the polls and known for his support of cryptocurrencies, his potential election could further boost the market. Chain Mind suggests that the $16 billion cash flow into crypto, combined with Trump’s support, could provide the necessary boost for significant growth.