According to the latest update from the on-chain analytics service Nansen, liquidators of the now-defunct crypto exchange FTX are finalizing sales of the remaining coins on the company’s balances.
Just yesterday, in fact, several cryptocurrencies such as MATIC, USDC, GALA, SUSHI, and DYDX were transferred from FTX/Alameda wallets to the centralized exchanges Binance, Coinbase, and Okx, most likely with the intent of selling them for fiat.
A total of $219 million in crypto assets have been transferred in recent days, including $108.3 million tokens belonging to EVM chains and $110.7 million SOL.
Speaking of SOL,since mid-October its price has risen significantly and is now back to pre-collapse levels of FTX with a capitalization of more than $18 billion. At the same exchange, which was the largest investor in the project until November 2022, there still remains a 5.6 million SOL stockpile to be liquidated.
Will this negatively impact the price of crypto?
We will find out in this article.
Nansen: $219 million in crypto transferred from FTX on centralized exchanges in just 8 days
Advanced on-chain analytics provider Nansen, posted an update on X about the process of liquidating crypto still held by the FTX exchange, which collapsed miserably last year.
FTX trading Ltd and the bankruptcy restructuring firm “Kroll Restructuring Administration” are indeed proceeding to sell all remaining assets in the portfolios of Sam Bankman Fried’s former company so that all creditors in the matter can be compensated.
FTX’s current CEO, John Ray III, is probably taking advantage of the latest bullish rally in the crypto market to get additional liquidity on the exchange’s corporate balance sheets.
Yesterday, Nansen became aware of a series of on-chain movements, in which several tokens held on FTX’s cold wallets had been transferred to centralized exchanges such as Binance, Coinbase, and Okx with a total value of $16.8 million.
These include $6.3 million worth of MATIC deposits, $2.6 million worth of dYdX verso, $1.6 million worth of SUSHI, $1.35 million worth of GALA, and $1 million worth of USDC.
Overall, if we consider only transfers with a countervalue of more than $1,000, we can see that from 25 October until now, $108.3 million worth of tokens belonging to EVM-compatible blockchains have been moved.
The largest assets in terms of value in the market include RNDR, MATIC, USDC, ETH, LINK, GRT, DYDX and BAND.
However, the largest holding owned by FTX is not included in the following table, as it does not fall into the EVM token category: we are talking about Solana (SOL).
If we also consider the amount of SOL liquidated recently, the loot collected by Kroll amounts to $219 million.
It should also be noted that the exchange still has a 5.6 million SOL bag, of which 4 million are locked in staking, while the remaining 1.6 million (recently unlocked), have yet to leave the company’s wallets.
Finally, it is very interesting to report a figure published by Nansen, according to which the total value of assets recently married by FTX/Alameda today recorded a positive difference of $15.8 million compared to 1 October, when the crypto market was still weak.
Following rumors about the impending approval of BlackRock’s spot bitcoin ETF, BTC led the rise of the entire crypto market, indirectly leading to an increase in the value of FTX’s holdings as well.
Among the coins that have observed a major price increase are RNDR, MATIC, and LINK.
The impact of these transactions on the crypto market and SOL price
Many believe that FTX liquidations may heavily impact the crypto market, leading the price of several coins to plummet given the huge amounts of coins held by the exchange.
In reality, we can confirm that compared to the trading volumes recorded on the Binance, Coinbase and Okx exchanges, the funds that need to be sold are not that large.
Let us take as an example the Nansens data cited in the previous paragraph, pertaining to transfers made yesterday to the centralized exchanges.
While in fact assuming that all 9.9 million MATIC were sold on Binance, we note that a total of 94 million of the same token were traded yesterday in the pair with USDT.
Although this is 10.5% of the daily volume( without considering other trading pairs of BTC, ETH, BNB and stablecoin), this had no negative effect on the price of MATIC, which yesterday registered +5.27%.
Also yesterday, from FTX 1.14 million DYDX were deposited on Binance , which corresponds to 11.5% of the daily spot volume in the pair with USDT: again no negative effect, on the contrary DYDX grew by 2.90%.
Then let us not compare volumes with SUSHI, which yesterday rose more than 47% despite the fact that FTX was continuing to sell 2 million units.
In general, we can conclude that FTX’s liquidations did not lead to immediate negative effects on the market.
In addition, we must keep in mind that the market tends to price these events in advance, hence if the exchange sales had to impact the price of the coins, the depreciations would have already occurred in the previous months.
Slightly different discourse for SOL, whose value is exploding to the upside and reached $46.90 yesterday, reaching a level not observed since August 2022. The crypto’s market capitalization has surpassed $18 billion.
Now, given and considering that there are still 5.6 million SOL left in FTX’s hands and that the average daily trading volumes recorded on Binance (SOL-USDT pair) in the last week amounted to “only” 7.89 million SOL, we can well understand how the effects of immediate liquidation might be more visible than the rest of the holdings.
In any case, before creating false alarmism, we must take into consideration the fact that the current management of FTX, is unlikely to sell the entire supply of coins in a single day and will probably decide to sell them in batches.
In addition, there is a possibility that these trades will take place OTC, so as not to directly impact the price of SOL.
Currently 4 million SOL are in staking, while only 1.6 million are marketable.
Consequently, although the FTX holding of Solana’s coin is significant it is considered likely that even in this case, liquidations will not lead to undesirable effects.