SBF here is still eating vegetarian food in prison, but FTX, without its boss, has ushered in a new turn of events.

After nearly two years of wrangling, after countless rekindling of hopes and shattered dreams, investors’ money finally has the possibility to be recovered. On January 3, according to FTX’s official announcement, the FTX debtor restructuring plan officially came into effect. Customers can submit claims through the official website to receive compensation refunds, and the first round of allocations will be initiated within 60 days of the effective date. The initial payout was approximately $1.2 billion, and after a lengthy bankruptcy and recovery process, FTX now has $14.7 billion to $16.5 billion to repay customers and other debtors.

As soon as this news came out, creditors cheered. Although the cash compensation made them bear the potential losses, the long road of debt collection has finally come to an end, and most users are still The eyebrows are filled with joy. But for the market, the mixed blessings seem to be more obvious. FTX's compensation means that liquidity may flood in, but its sell-off fundraising has also cast a shadow on some currencies.

I have to admit that the black swan incident two years ago is still having a profound impact on the encryption market even today.

The FTX incident is undoubtedly a negative highlight in the not-too-distant history of encryption. At that time, the collapse of FTX swept the entire encryption field, with chain reactions affecting hundreds of encryption companies, and hundreds of investment institutions suffered losses. This not only caused the market to suffer a heavy setback, but also completely wiped out the newly improved mainstream recognition of cryptocurrency. On the other hand, misuse of funds, financial fraud, lottery decisions, and various outrageous operations of SBF and its team have also made users extremely angry at being manipulated and played.

Back to debt, on November 12, 2022, SBF announced on social media, including the exchange FTX.com, related trading company Alameda Research, etc. 130 Multiple affiliates have voluntarily filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in order to "evaluate and realize assets in an orderly manner in the interests of global stakeholders." Initially, the Wall Street Journal said FTX had a funding gap of about $8 billion. However, as the trial continued, the total amount of claims increased at an alarming rate. In the end, there were more than 36,000 claims and the total amount of claims was approximately US$16 billion.

Since then, creditors and FTX have begun a long tug-of-war. Reorganizations like "Wolf Crying" have occurred one after another, and FTT has once become the core subject of this narrative..

As early as January 23, FTX’s newly appointed CEO John J. Ray III had stated that he planned to restart the exchange. Not surprisingly, after the collapse of trust, At this time, no one cared. It was not until three months later, in April 23, that Andy Dietderich, a lawyer from FTX’s law firm Sullivan Cromwell, once again stated that FTX was considering reopening its exchange business at some point in the future. Since some of the arrears had been recovered at that time, the market began to go from crazy to crazy. The debt collection perspective shifted to the restructuring plan. Subsequently, the reorganization welcomed good news. In May, John J. Ray III confirmed the FTX 2.0 plan. In June, court documents even showed that many companies including Nasdaq, Ripple, BlackRock, etc. had acquired it. plan.

Affected by the news, although the company once fell silent, the market's confidence in the restructuring plan gradually increased. It was not until November 23, after SEC Chairman Gary Gensler mentioned that “it is possible to restart FTX within the legal framework”, the market officially participated in restructuring narrative pricing. The directly underlying FTT was robbed off-site and soared 40%, reaching a maximum of $5.54. However, with the disclosure of court documents, the court confirmed the properties of its utility tokens and declared that the intrinsic value of FTT was zero, which once again shattered the dreams of holders.

Although the FTT dream is shattered, creditors’ compensation is a certainty. As the crypto market continued to rise, in February 2024, FTX stated that it had sufficient funds to fully pay all approved customer and creditor claims. On October 8, a U.S. court judge officially approved FTX’s restructuring plan, which allowed FTX to repay creditors for the first time, involving an amount of more than $14 billion.

The time point of the compensation plan was pushed back and forth, and finally on January 3 this year, the FTX debtor restructuring plan officially came into effect. The first debt payments will begin within 60 days of the Jan. 3 effective date. According to the FTX plan, creditors need to complete tax form submission and KYC verification before January 20. The first batch of "convenience category" users will be repaid first, including users with a claim amount of US$50,000 or less, which accounts for about 98% of users. , will be expected to receive repayment of 119% of the declared value of its funds with interest. The first batch of compensation is expected to be US$1.2 billion, and there is no specific timetable for the remaining payments. BitGo and Kraken will assist FTX with compensation, and both have initiated customer notifications during the compensation process.

FTX did not forget to add time interest on top of the debt. It seems that everyone is happy, but for creditors, it is not a perfect ending. The reason is that in the compensation, FTX mentioned that it can only pay in stable currency and legal currency. The reimbursement shall be made in the form of the form, and it shall be noted that the reimbursement amount is based on the application date of submitting the claim. Depending on the value, this date was concentrated around November 22, but at that time, the crypto market was in a huge shock, and Bitcoin once fell to US$16,000. But now, Bitcoin has reached US$95,000, an increase of more than 4 times. Obviously. It's a far cry from the so-called 119% "repayment with utmost benevolence and justice". style="text-align: left;">Some creditors are also dissatisfied with this, especially large creditors. For example, Sunil Kavuri, the representative of FTX’s largest creditor group, once said that FTX should pay compensation in “BTC physical form” instead of Cash equivalent. But it is obvious that FTX will not agree. Even if it wants to agree, it is unable to do so. The FTX liquidation team once said that when it took over, BTC only had 0.1% of the book amount.

Overall, most creditors are still satisfied with the compensation. After all, the road to debt collection is not smooth sailing, and settling down is the key. On the other hand, such a large compensation has naturally attracted the attention of the market. 16 billion US dollars, where does FTX come from?

As for how to get there, FTX’s wallet is enough to explain the problem. As early as the end of August 2023, the shareholder report disclosed FTX crypto assets. The 10 major currencies accounted for 72% of the total FTX crypto asset holdings. At that time, the total holdings were Valued at approximately US$3.2 billion, SOL holds the largest holdings, reaching 55 million, BTC holds approximately 21,000, and ETH holds 113,000.

Since the restructuring plan began, FTX has been selling coins to repay the money. At the beginning of 2024, FTX liquidated it. The total 22 million shares of GBTC held include approximately 20,000 BTC. In October, FTX sold US$28 million of SOL, and in December, it released US$178,000 of SOL pledge again.

Judging from the current holdings, FTX has completed the sell-off of most mainstream currencies, and the total holdings of crypto assets are more than $13.43. There are 20 currencies, among which FTT has the most concentrated value, with a total value of 6.26US$100 million, followed by OXY with a total of US$301 million. MAPS and Media also held positions of more than US$100 million.

The sell-off will undoubtedly affect prices in the short term, especially since the liquidity itself is relatively small. Or currencies with greater FTX concentration, currencies at the forefront of positions are more likely to be widely affected. FTT is the first to bear the brunt. This currency that has been reduced to MEME is likely to have no one to take over. OXY, MAPS, MEDIA, FIDA, BOBA, SRM, AMPL, etc. will be affected due to the large proportion of FTX holdings.

From the current point of view, FTX address repayment is still being prepared, and more funds are flowing to the exchange every day, but at this stage, there has been no impact on the currency. Large impact, the impact seems to be relatively controllable. The periodic impact is still there, but the market has also looked at the selling pressure from a longer-term perspective.

After the repayment of US$16 billion is in place, will it flow into the encryption market? Coupled with the special date of Trump's inauguration on January 20, some industry insiders are optimistic that this move may catalyze the next round of rise in the cryptocurrency market cycle in 2025, allowing Bitcoin to break through to new highs again.

This statement is not groundless. The creditors of Mentougou are a precedent. In the disclosure on July 30, 2024, Mt. Gox completed the distribution of 41.5% of Bitcoins to creditors, and creditors received a total of 59,000 Bitcoins. However, Glassnode shows that although Mt. Gox creditors received nearly $4 billion worth of Bitcoin, most groups did not sell it. Instead, the value returned and became firm holders.

Of course, whether creditors who have suffered heavy losses will choose to hold it still depends on personal preference and cannot be unified. It is worth noting that due to the protracted debt recovery process, most original creditors will isolate or sell the debt to a debt settlement company early in order to get rid of the debt as soon as possible and obtain funds. This proportion is not a minority, and this part of the funds is expected to be unlikely to flow back.

But no matter what, some of the funds from encryption will inevitably flow into encryption. This is still a problem for the encryption field where liquidity is frequently in short supply. One good thing.

Back to the current market, garbage time is still continuing. The rise in macro data, the uncertainty of the external situation, and the debt crisis of the US authorities have caused a sharp increase in risk aversion in the market.Risk assets have suffered a blow, and even the recent natural and man-made disasters in the United States have once again increased the market's concerns about liquidity.

On January 7, wildfires broke out in California, USA. This is a normal event that occurs every year, but this year’s wildfires were affected by record-breaking summer high temperatures. Especially affected by drought. According to the latest data from the California Disaster Relief Department on the 12th, wildfires have resulted in 24 deaths and 16 missing people. The total area burned by the four wildfires in the county has exceeded 160 square kilometers, which is larger than the area of ​​San Francisco. Analysts at AccuWeather expect economic losses to be between $135 billion and $150 billion. Currently, Biden states that the United States will pay "100% of all costs" caused by the disaster and will ask Congress to provide more financial assistance.

In the face of this natural and man-made disaster, the economic level has suffered a huge blow, whether it is due to the long-term impact of insurance assessment, personal hedging needs, or long-term With concerns about U.S. inflation and debt, the conservative trend of liquidity will only become increasingly prominent. What is even more noteworthy is that for risk markets, emotional fluctuations are continuing to expand.

After the incident, California Governor Newsom blamed the local area, while US President-elect Trump pointed out that Democratic California Governor Newsom and Current President Joe Biden is to blame for this fire. The rivalry and conflicts between the two major parties have not slowed down even in the face of unified natural disasters. Responsibility-shifting and internal fighting will only shake global confidence in the stability of the U.S. financial market.

As Trump takes office, any incident can easily arouse the sensitive nerves of the encryption and even risk markets. Even if the direct impact is limited, there are still risks and risks. worry. Just a few days ago, Tom Lee, chief investment officer of Fundstrat Capital, a staunch bull on Wall Street, came to sing down, saying that due to the shrinking global liquidity, although the long-term bullish forecast of $250,000 remains unchanged, Bitcoin may fall sharply from its recent highs. Testing support at $70,000 and even $50,000.

Misfortune brings blessing, but it is also the time when Trump comes to power. Bitcoin’s expected support is still relatively solid. Early this morning, the Washington Post reported that David Sacks and the Trump transition team are working closely with encryption industry leaders to formulate legislative strategies. Trump is expected to sign an executive order on his first day in office, which may involve "debanking" and abolition. Controversial crypto accounting that requires banks to include digital asset holdings on their own balance sheets.

Affected by this, Bitcoin has once again returned to above $95,000. As of press time, BTC is currently trading at $95,452 and ETH is at $3,183.