Bitcoin bounces back after dipping below $25,000 on concern over FTX dumping crypto assets
Bitcoin is now rising after dropping below $25,000 on Monday, with many investors gearing up for the FTX estate to sell billions of dollars in crypto assets back into the market.
The most popular cryptocurrency, after falling to $24,900, rebounded and was up nearly 1.6%, to about $26,100, on Tuesday morning. The second-most popular cryptocurrency, Ethereum, was up less than 1% to about $1,600.
Behind the decline was investor anxiety over potential actions from the FTX bankruptcy estate, which is responsible for more than $3.4 billion in crypto. The estate is keen to unload it to recover as much as possible for the firm’s creditors. Last month, under its new CEO, the bankruptcy expert John J. Ray III, the company asked permission of the court overseeing its case to hire Mike Novogratz’s Galaxy Digital Capital Management to help it start selling, staking, and hedging crypto assets.
Under the plan FTX submitted to its bankruptcy court, the company would be allowed to sell up to $100 million in tokens per week, a figure that could increase to $200 million for specific tokens. The plan must still be approved by the bankruptcy court.
The company owned an estimated $268 million in Bitcoin as of January, according to Decrypt, and offloading too quickly could depress prices. Likely, though, more pain would be inflicted on smaller cryptocurrencies like Solana and Polygon, of which it owns an estimated $685 million and $39 million, respectively, that could potentially be unloaded.