A renowned crypto enthusiast on X (formerly Twitter), “Lady of Crypto” has been keen on following and reporting on the FTX scandal.
Whatever the case might be for the exact date, such a move might pump up to $16 billion into the crypto market. The lingering question is what implications this will have on the current market environment and whether this could usher in a historic bull run.
FTX repayments start next week.
Most don’t understand what this means.
$16b USD going to the bank accounts of crypto degens 🤯
Degens who missed the bottom because of Scam Wankman Fraud.
This will be their last chance buy alts heavy.
Never have we had $16b handed directly to…
— Lady of Crypto (@LadyofCrypto1) September 28, 2024
What did the FTX Repayments mean?
While the highly anticipated FTX repayments cannot start before a critical court hearing scheduled for October 7, 2024, excitement has been heavily touted. During that hearing, the company’s Chapter 11 bankruptcy restructuring plan will be assented to. Only then will creditors begin to receive funds, but possibly not until 2025 for larger institutional investors.
If the court grants approval, recipients could begin getting the funds at the end of 2024. That would apply mainly to those with relatively small claims over $50,000. Of course, this has sparked speculation that these “degens,” or risk-loving crypto investors, will use their payouts to jump back into markets. In other words, $16 billion that may flow into crypto-asset classes could bring an opportunity to reinstate money that may cause an upward surge.
A New Bull Run on the Horizon?
With the return of FTX funds, many speculators argue about an explosive bull run. The reasons are simple: billions in fresh capital, which is going to risk-hungry investors, will likely find its way back into altcoins and other crypto assets. This liquidity might be just what’s needed, especially this early on in recovery from the most recent market downtrend.
If used for reinvestment, these repayments would align with the present positive trend in the crypto sphere. Bitcoin has already shown resilience by breaking major resistance levels; the DeFi space continues to grow. A massive inflow of cash directly into the hands of individuals ready to take advantage of a possible rebounding market may accelerate the bullish trend much further.
Is the Crypto Market Ready?
However, despite this optimism, not all are convinced that this sudden infusion of capital guarantees a surge in the market. Some creditors are unhappy with mere cash instead of cryptocurrency, which could give more value in the long run with the current market prices of digital assets. Besides, tax implications in some jurisdictions could dampen the desire to reinvest.
Despite these concerns, the FTX repayments will inevitably move the markets. The question will now be whether this will be the igniter that gets the fire going for the next bull run or whether the crypto community must hold its horses as the repayments will be rolled out in due course.
