FTX repayment is the key to saving the market? Analyst: $16 billion in huge funds entering will be the biggest catalyst for price increases

Bitcoin (BTC), which has been falling recently, fell again to around $54,260 this morning, almost erasing the rebound gains over the weekend. The market mainly attributes the recent selling pressure to the start of Mt. Gox repayments and the large amount of Bitcoin transfers suspected of cashing out by the German and US governments.

Andrew Kang, co-founder of Mechanism Capital, estimates that Bitcoin may fall to as low as $40,000, and it may take several months of volatility and downtrends (recovery period) before rebounding.

However, amid the general bearish expectations, a well-known trader observed potential bullish factors that could drive the cryptocurrency market to new highs, especially the repayment of FTX.

FTX repayment allows $16 billion to be injected into the crypto market

Crypto trader Ash Crypto, who has nearly 1.17 million followers on Twitter, pointed out yesterday:

"$16 billion in stablecoin liquidity will enter the crypto market."

"People are worried about the Mt. Gox crash and other bearish factors, but there are factors that will push the crypto market to new highs. FTX plans to distribute more than $16 billion to its creditors."

He explained that FTX expects to complete the creditor vote on its reorganization plan on August 16, and the judge will decide whether to approve the repayment plan by October 7.

If approved, FTX plans to repay creditors within two months, possibly between the fourth quarter of 2024 and the first quarter of 2025. Ash Crypto believes that this timing perfectly matches the expected interest rate cuts, the implementation of the US FASB accounting rules, and the US presidential election, forming a catalyst for the upward trend in the cryptocurrency market. He predicts that Bitcoin may break through $120,000 as a result.

Given that most of FTX's customers are cryptocurrency enthusiasts, the $16 billion injection is expected to be a major catalyst for price increases.

Bitcoin is expected to exceed $120,000, while Ethereum (ETH) may exceed $12,000, and the prices of many other altcoins may rise 10 to 50 times.

FTX extends its claim application to Q3 this year

FTX released its latest repayment plan earlier this month, saying that the estimated amount owed was about $11.2 billion, but after the sale of assets, there was about $14.5 billion to $16.3 billion in cash available for compensation, so not only can a full refund be achieved, but the vast majority of users (those who once held funds below $50,000) can receive about 118% cash compensation.

However, it should be noted that the loss compensation is calculated based on the platform funds on the day FTX exercised Chapter 11 of the Bankruptcy Law, so unless the assets placed by the user in FTX are stablecoins, it is actually still a big loss (BTC was only $17,000 at the time)

To obtain compensation from FTX, creditors need to complete the claim application within the specified period. The original deadline was yesterday (15th), but an email sent to customers by FTX's Bahamas entity (FTX Digital Markets Ltd.) showed that the deadline for submitting claims has been extended.

FTX extends claims to late July or early August

According to the letter, FTX has decided to extend the deadline for claims to late July or early August. The original deadline was set on May 15, 2024, which was the deadline for FTX customers to submit claims and participate in the Bahamas liquidation process.

According to the latest notice, the deadline will coincide with the voting deadline for US creditors to approve the Chapter 11 reorganization plan. The specific new deadline has not yet been determined, but it is expected to be in late July or early August. This means that customers will have an additional 10-12 weeks to submit claims.

Customers can choose to participate in the liquidation process in the Bahamas or the United States, but not both at the same time. In June, customers will receive relevant documents and have 6-8 weeks to make a final choice.

Emails received by FTX customers

Regardless of which liquidation procedure is chosen, customers are expected to receive the same compensation at the same time. The notice emphasized that most customers only need to complete the US procedures unless there are special needs.

How to confirm whether your claim KYC has been completed?

On September 18 last year, FTX customer claims portal Claims.ftx.com was opened, and users can submit claims, complete KYC and submit debt proof. You can log in to your account to confirm the current KYC progress.