FTX Sells Off a Staggering $500M in Crypto in December 2023

• FTX Cryptocurrency Exchange Liquidates $240 Million in Crypto Assets
• Details of the Liquidation
• The Impact on Solana (SOL)
• Continued Liquidation and Its Potential Effects on the Market
• Correction in the Value of FTT

FTX Cryptocurrency Exchange Liquidates $240 Million in Crypto Assets

FTX$3.28 -5.38%, a now-inoperative cryptocurrency exchange, reportedly liquidated $240 million in crypto assets in a single day. Data from the exchange's Bankruptcy Crypto Asset Liquidation reveals that a total of approximately $500 million has been sold off in December 2023. This large-scale liquidation may be a contributing factor to the recent downturn in the crypto market.

Details of the Liquidation

FTX's liquidation actions form part of a wider strategy to repay billions to both its customers and creditors. Nevertheless, this plan has generated numerous uncertainties, particularly regarding the valuation of crypto tokens and the projected recovery rate for creditors. The presented proposal is scheduled for a creditor vote next year and will need the endorsement of US Bankruptcy Judge John Dorsey.

The proposal stipulates that significant cash distributions will be made following the sale of a substantial share of the exchange's holdings. An estimate provided by ChatGPT, and shared by a user identified as Mr. Huber, suggests that a team of approximately 8,000 to 12,000 lawyers may have been involved in the FTX proceedings.

The Impact on Solana (SOL)

Solana$104 5.03% (SOL) makes up a considerable percentage of the exchange's holdings. FTX's founder, Sam Bankman-Fried, demonstrated a strong confidence in the token, purchasing large amounts at low prices. Reports indicate that the exchange holds over $1 billion in SOL tokens.

Continued Liquidation and Its Potential Effects on the Market

It is expected that FTX's liquidation efforts will persist. The significant asset sales will likely influence market trends in the coming weeks. This could potentially disrupt the expected crypto market bull run in 2024. However, the potential impact may be mitigated by a Bitcoin$42,260 -0.64% (BTC) ETF (Exchange Traded Fund) and BTC's halving in April.

Correction in the Value of FTT

FTT, the firm's native token, has also experienced a significant correction. FTT has seen a 9.2% decrease in value over the past 24 hours, and a fall of over 28% in the weekly charts. The token is also down by 32% in the 14-day charts. Despite this, FTT has seen an increase of over 16% over the previous month, and a rise of over 224% since December 2022.

Edited by Jonathan Stoker