FTX Bankruptcy: Can $16 Billion in Compensation Support Bitcoin?

The price curve of Bitcoin has fallen below $55,000 and BTC is now trading at its lowest level since mid-February. But compensation from the FTX bankruptcy is getting closer – a positive signal?

In the USA, July 4th was just celebrated as Independence Day and so the traditional stock exchanges were also at a standstill. Meanwhile, the crypto markets have entered a sharp downward trend overnight, the leading currency Bitcoin (BTC) had to cope with a loss of 7 percent and is now trading at under $55,000 – a severe setback. There are several factors that are currently causing nervousness about Bitcoin:

– The German government is moving confiscated Bitcoin to crypto exchanges on a large scale and probably wants to monetize them – the approximately 50,000 BTC affected could bring in up to 3 billion US dollars and cause price pressure.

– Bitcoin from the Mt. Gox hack of 2014 is also expected to be released again soon, with a volume of up to $10 billion at stake. The markets are concerned about whether this will lead to massive BTC sales.

– The US presidential election campaign is coming to a head and uncertainty about the outcome and the candidacy of incumbent Joe Biden are not a breeding ground for optimism. Weakening economic data are doing the rest.

But you can still find some potentially good news. On X , “The DeFi Investor” refers to an event that is, in his view, too often forgotten and which is imminent. Almost two years after the bankruptcy of the crypto exchange FTX, compensation payments should begin in the coming months and fiat is planned for these.

“The DeFi Investor” posted a corresponding list, according to which a good $16 billion in cash should flow to the FTX victims. He assumes that a large part of this sum will be reinvested in Bitcoin and Co. because former FTX customers have not lost their interest in crypto. However, it is objected that according to the current schedule, the FTX compensation payments will not start until October at the earliest and the actual sum could be less than $10 billion.

Conclusion: Difficult summer for Bitcoin – risk of panic

For the moment, there is little to suggest that the crypto markets are easing, and the news situation does not exactly suggest a quick recovery in the Bitcoin price curve. Investors who have been around for a long time are familiar with situations in which panic breaks out around Bitcoin and to which BTC owes its reputation as a highly volatile asset class on the negative side.

Many analysts are hoping for the fourth quarter, when there will be clarity about the US president, key interest rates could be lowered and the large Bitcoin flows from past events have been settled. But right now you should also be careful not to be caught off guard by significant Bitcoin price fluctuations if your strategy is measured in months and not years.

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(Featured image by Kevin_Y via Pixabay)

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