Although the cryptocurrency market has been in a downward trend for a long time, there is a silver lining. In a recent statement, Coin Bureau CEO Nic Puckrin pointed out an important catalyst that could stimulate the market and contribute to rising prices. This catalyst will occur as $14 billion in funds from the FTX exchange crash returns to cryptocurrency.
A ray of hope for cryptocurrencies
Although the cryptocurrency market has been in a downward trend for a long time, there is a ray of hope on the horizon. In a recent statement, Coin Bureau CEO Nic Puckrin pointed out an important catalyst that could stimulate the market and contribute to rising prices. This catalyst will occur as $14 billion in funds from the FTX exchange crash returns to cryptocurrency. As we reported as Kriptokoin.com, FTX’s bankruptcy in late 2022 shook the cryptocurrency world. But two years after this incident, a surprising development occurred.
The bankrupt company offered to pay 118% to all its creditors. This represents a staggering total sum of $14.5 billion. It is estimated that a significant part of this money will go to creditors who have already invested in cryptocurrencies. Puckrin believes that some of these funds will be reinvested into cryptocurrency markets. This is currently the case with Mt. Gox exchange, which may create selling pressure on the market.
Liquidity will increase
Additionally, agreements with the Gemini crypto payment platform will also contribute to liquidity. As a result of these agreements, $10.6 billion worth of crypto money will be sent to creditors. When fiat payments from FTX are added, total liquidity will show a net increase of $3.9 billion. Analysis firm K33 calculated how this liquidity could affect the market by examining various scenarios. Even in the worst-case scenario, net liquidity is estimated to increase by $2.3 billion. In the most optimistic scenario, this figure can exceed 4 billion dollars.
Puckrin argues that these estimates are quite conservative and actual liquidity may be higher. He predicts that at least 50% of funds from FTX will return to Bitcoin (BTC). This is Mt. Even if Gox/Gemini divested 50% of its buyers’ assets, it would result in net liquidity of at least $1.9 billion. However, Puckrin underlines that timing is also important. Gemini’s month of June, Mt. Gox is targeting payments for October, while FTX creditors are expected to receive their funds at the end of the fourth quarter. Therefore, it may take some time to see how much FTX credit investors’ purchases will impact the market. Despite this development, Puckrin remains optimistic and says, “It is good to see that there may be some forces resisting the selling pressure.”
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