At least $3.4 billion worth of crypto is likely to be sold by FTX so it can return fiat currency to its users instead of tokens, which should create an overhang for altcoins for the rest of the year, Matrixport said in a report Monday.
The crypto services provider noted that FTX has said it wanted to sell $200 million worth of crypto assets a week. This means the bankrupt crypto exchange will continue to sell assets until the end of 2023.
Moreover, FTX isn’t the only major seller in the market. “Crypto venture capital (VC) funds are also under immense pressure to return funds to their investors,” wrote Markus Thielen, head of research. “Those VC funds are likely to remain as crucial sellers of altcoins and must cash out.”
Solana (SOL) has been dropping, spooked by the potential sales from FTX, and it’s not the only altcoin that is exposed.
There is also ApeCoin (APE), another crypto held by VC investors, which has an unlock scheduled for Sept. 17. That will account for 11% of outstanding tokens, the report said. Following the previous unlock of 4.2% APE on Aug. 17, prices have dropped by 24%. Since this one is larger, prices are expected to continue to decline.
Another sizable unlock planned for Oct. 20, is Axie Infinity’s token (AXS), when 11% will be released. Since the last such event, on July 22, AXS has declined by 32%, the report added.
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