FTX’s $8M Altcoin Sell-Off Raises Concerns Over Market Influence

FTX, which is currently undergoing bankruptcy proceedings, has started selling off its cryptocurrency assets, leading to speculation in the market. The sale of FTX’s crypto assets, combined with a significant increase in the crypto market, has raised questions about its potential impact on market dynamics and investor sentiment.

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FTX Offloads ETH & JSOL Reserves

In order to speed up the liquidation process during bankruptcy, FTX has sold off a large portion of its crypto holdings. This included the transfer of 50,000 JPool Staked Solana (JSOL) tokens, valued at nearly $6.6 million, to an undisclosed wallet. Additionally, FTX sold 542 ETH, equivalent to $1.36 million, to Wintermute, a well-known crypto market maker.

These transactions, along with an internal transfer of 10,700 ETH from Alameda Research, equivalent to $20.8 million, have led to increased outflows in the market, potentially causing downward pressure on prices and impeding the ongoing crypto rally.

Market Impact & Ethereum Surge

Despite FTX’s significant selling activity, the price of Ethereum has remained strong, with gains of over 7% and surpassing the $2,600 mark. This resilience highlights the demand for Ethereum and its ability to withstand market shocks, even when large-scale sell-offs are carried out by entities like FTX.

While the liquidation may have temporarily increased market volatility, Ethereum’s upward momentum has largely remained intact, supported by strong investor confidence and positive market fundamentals.

FTX’s Strategic Divestment

As part of its efforts to restructure during bankruptcy, FTX has chosen to divest Digital Custody Inc (DCI), a subsidiary it had previously acquired, at a significantly reduced price compared to its initial purchase cost.

The sale, facilitated through CoinList, was capped at $500,000, much lower than the $10 million FTX had originally paid for DCI in August 2022. This strategic move is part of FTX’s broader initiatives to streamline operations, minimize losses, and repay creditors following the collapse of Sam Bankman-Fried’s crypto empire.

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