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Is FTX crashing our beloved crypto market again? đ¤
Not quiteâŚ
You may have seen this graphic all over X in the past few days. Itâs showing that FTX is currently holding over $3 Billion worth of crypto.
These are assets that FTX will sell at some point, in order to pay back its creditors.
As this circulated online, a lot of people called for a massive Bitcoin, Ethereum and Solana crash.
As per usual, this space overreacted. đ
Let us clarify some thingsâŚ
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Will FTX Sell These Tokens? đ¨
Yes. FTX will eventually sell these tokens, but not all at once. Thatâs for a few reasons.
Firstly, theyâre looking to get the most out of their holdings. By dumping everything on the market at once, theyâre only going to crash the markets, getting less $$$ than they could.
Therefore, the selling will most likely occur through OTC trades.
Over-the-counter (OTC) is trading assets directly from a seller to a buyer as opposed to on the open market through an exchange like Coinbase.
This means that tokens wonât be dumped into the markets.
Secondly, thereâs a restriction on how much they can sell. FTX would only be allowed to sell up to $200 million worth of crypto/week.
Thirdly, some of the tokens that they hold are still in a vesting period. This means that even if they want to sell them, the tokens are locked on the blockchain, and nobody has the ability to unlock them before their unlock date. đ
Solana is counted among these locked tokens, so letâs dive more into thatâŚ
Solana: Will It Go to ZERO? đ
As you can see on the FTX holdings chart, Solana has the most to suffer, because FTX holds over $1 billion worth of $SOL.
FTXâs $SOL holdings represent 15% of Solanaâs current market cap. If they were to sell it all, it would be detrimental. đ
However, if you wouldâve read our PRO report on the Tokenomics of $SOL, you would know that most of FTX & Alamedaâs $SOL holdings are still in their vesting period.
In fact, 42 million $SOL â worth about $760 million is currently locked.
Most of which are going to be unlocked sometime in 2025.
Some tokens will be unlocked in the meantime, but those will have a very low impact, as thereâs only a little bit thatâs being unlocked every month.
So⌠With that said, no, Solana wonât go to 0 this week.
But will other tokens? đ¤ Letâs explore. âŹ
By the way⌠if youâd like to stay ahead of news like this, then I suggest you upgrade your subscription to PRO.
Our members received this information back in July, and weâre sharing this type of onchain alpha every week.
If youâre serious about investing & building in web3, then Web3 Academy PRO is for you!
Will Other Tokens Be Impacted? đ¤
Letâs go over some of the tokens that face concerns due to the coming FTX selloff.
Bitcoin
The $BTC that FTX holds is equal to 3% of Bitcoinâs daily trading volume and 0.11% of Bitcoinâs market cap.
Even if FTX sells everything at once, Bitcoin wonât feel a thing.
Ethereum
Similar to Bitcoin, the $ETH that FTX holds represents only 2.6% of Ethereumâs daily volume and 0.1% of Ethereumâs market cap.
Ethereum wonât nudge either.
But what about smaller cryptocurrencies?
According to Messari, Aptos, Tron, Matic and Doge all have a really bad âsell pressure to volume ratioâ.
What that means is that if FTX dumps all of these tokens at once (they wonât), the prices of these assets will feel the impact.
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Wrapping Up: Can You Capitalize? đ°
Itâs really important that you leave this article knowing exactly whatâs going on, so letâs recap:
FTX will probably not sell tokens on the open market
Even if they do, they can only sell $200 million/week
The sell pressure will have almost 0 impact on $BTC and $ETH
Most of the $SOL that FTX holds is locked until 2025
Aptos, Tron, Matic and Doge are the tokens that could be impacted slightly
Again, the FUD around this news is worse than the actual event itself. Typical of web3 & crypto. đ¤Ś
And the price dump from this week was only caused by the negative narrative, not by anything fundamental that happened onchain.
So⌠Can you capitalize? Of course you can!
When prices go down because of a negative narrative, itâs often a great buying opportunity, especially when the tech is thriving.
Prices
If you're not investing now, you're doing it wrong!
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And the tech is thriving! Ethereum & Bitcoin look more bullish than ever, and Solana just got a partnership with Visa last week.
Yet, these tokens all took a dive because of this FTX news⌠So, if youâre looking to capitalize on the opportunity, youâll keep stacking the tokens that you think have intrinsic value and that you believe will do well in the bull market.
Nothing else matters, and I hope I managed to calm some nerves today by giving you some clarity.
Iâll catch you tomorrow with a PRO report on FriendTech. âď¸
Thanks for reading. And remember, you're strong, youâre powerful, youâre alpha! â¤ď¸
See you soon. âď¸
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Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.
