In recent days, the cryptocurrency market has been hit by a fresh wave of pressure following the latest developments surrounding the collapsed FTX exchange.
Notably, the collapsed crypto trading platform proposed liquidating over $3 billion in recovered crypto assets, sparking new concerns among investors.
Many now worry that this massive sell-off could exacerbate the challenges facing already-struggling cryptocurrencies with an ‘impending $3 billion liquidation‘ potentially on the horizon.
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What is going on?
FTX, a once-leading cryptocurrency exchange that imploded in November 2022, is set to appear in Delaware Bankruptcy Court on Wednesday, September 13, to request approval for liquidating $3.4 billion in Bitcoin (BTC) and other cryptocurrencies.
The news comes after the company, which is now led by bankruptcy legal experts, proposed to hire a blockchain firm, Galaxy Digital, to oversee the sale and management of recovered user funds. If approved, the plan would allow FTX to offload up to $100 million of crypto tokens per week, which could be increased to $200 million for individual assets.
According to the estimates revealed in January, FTX’s cryptocurrency holdings amount to $685 million in locked Solana (SOL) tokens, $529 million in FTT, $268 in BTC, $90 million in Ethereum (ETH), and $42 million in Dogecoin (DOGE), among others.
FTX rumors overshadow bullish news for SOL and ETH
As the crypto world awaits the court’s decision, investors and market participants are increasingly concerned that a potential FTX-led fire sale could leave a bearish impact on the already-struggling cryptocurrencies, particularly those held by the crypto exchange.
For instance, previous filings showed that Solana accounts for the largest portion of FTX’s assets, placing the altcoin under substantial pressure. Due to these fears, SOL failed to capitalize on the recent bullish news that credit card giant Visa added support for Solana, expanding its stablecoin capabilities.
The partnership now enables users to utilize the Solana blockchain to send or receive settlements in USDC stablecoin.
In a similar manner, ETH’s price also remains in the red, despite significant news that Cathie Wood’s ARK Invest filed for the launch of the first spot Ether exchange-traded fund (ETF) in the US.
The second-biggest cryptocurrency was down 1.1% on September 11, losing over 2% on the week and more than 13% in the past 30 days.
Meanwhile, SOL fell around 2% in the past 24 hours, 9% over the week, and nearly 27% over the month.
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