FTX Report from Coinbase: How Could the Possible Sale of Coins Held by the Exchange Affect the Market?

coinbase Bankrupt crypto exchange in research report FTX He argued that selling tokens held by the company is unlikely to cause a significant market shock.

Coinbase Doesn’t Think FTX’s Token Sales Will Affect the Market

According to Coinbase, several factors will moderate the impact of these sales.

First, token sales will be subject to volume limits, and liquidations will be limited to $50 million per week in the first phase.

This limit is planned to be increased to 100 million dollars in the coming weeks. Specifically, any permanent increase to a maximum of $200 million per week would require approval from committees representing FTX borrowers.

FTX is now worth about $1.16 billion, according to a recent court filing. Solana (LEFT), 560 million dollars Bitcoin (BTC)192 million dollars Ethereum (ETH) and holds $1.49 billion worth of various other tokens.

The court authorized the exchange to sell these assets and use them to repay creditors.

Additionally, the sale of certain “insider” tokens requires strict controls and 10 days notice to the relevant committees.

A significant portion of FTX’s Solana holdings will remain locked until 2025 as part of the token’s vesting program, along with some other tokens planned for sale.

Finally, FTX will have the option to hedge Bitcoin, Ethereum and other token sales through an investment advisor, pending committee approval.

These combined factors are expected to mitigate potential market declines that may result from FTX’s token liquidation sales.

*This is not investment advice.