In a recent research report, Coinbase clarifies an important situation for the crypto market. Accordingly, it reassures that the upcoming sale of tokens held by the bankrupt exchange FTX is unlikely to cause a market shock. According to the report, there are several key factors that contribute to this feeling of stability and control.
Coinbase report: Controlled liquidations to prevent market flood
An important factor is the controlled approach to liquidating FTX’s assets. The Coinbase report states that liquidations will be limited to $50 million per week in the first phase. This cautious approach will help prevent a sudden and overwhelming influx of tokens into the market. As the process continues, the limit will gradually increase to $100 million per week, pending approval by committees representing FTX borrowers. There is potential for further increases, up to a maximum of $200 million per week.
FTX owns Solana (SOL) at approximately $1.16 billion. He also has $560 million worth of Bitcoin (BTC) and $192 million worth of Ethereum (ETH). On the other hand, a diverse token portfolio consisting of different tokens worth $1.49 billion will be part of the sale. The move allows FTX to leverage its assets to repay creditors as mandated by a recent court decision.
Strict controls for ‘Insider’ tokens
The Coinbase report also highlights the existence of “strict controls” for the sale of certain tokens associated with insiders. Accordingly, these tokens add an extra layer of oversight and transparency by requiring 10 days notice to the committees responsible for overseeing the process.
Token locking periods and hedging are also included in the report. Accordingly, Coinbase specifically draws attention to a significant portion of FTX’s solana assets. It is locked until 2025 in accordance with the token’s vesting schedule. This limitation makes the issuance of tokens even more controlled. Additionally, FTX has a significant opportunity after receiving committee approval. He has the opportunity to hedge Bitcoin, ETH and other token sales through an investment advisor.
Caoinbase research is refreshing
Overall, the Coinbase report suggests that the structured approach, combined with controlled liquidations, diversified holdings, and oversight measures, will prevent sudden shocks to the cryptocurrency market resulting from token sales during FTX’s bankruptcy proceedings.
On the other hand, it is obvious that the Coinbase report is positive. Accordingly, it is important that the assets are not sold suddenly. A sales process that extends over time certainly indicates a healthy situation. When we look at Kriptokoin.com, we can say that the expectations with the Coinbase report indicate that the process is easy.
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