The crypto market seems to be heading for a rough ride, as at least $3.4 billion worth of crypto assets are projected to be sold by FTX. In a recent report by Matrixport, it was highlighted that the exchange aims to offload $200 million worth of assets weekly, implying a massive sell until the end of 2023 as it seeks to return fiat currency to its users as opposed to tokens. Unsurprisingly, this development is raising eyebrows and likely to induce a cloud of uncertainty for altcoins throughout the year.
Nevertheless, it’s not just FTX pushing for asset sales. Crypto venture capital funds are reportedly facing massive pressure to return investments. Analyst Markus Thielen pointed out that these VC funds are looking to cash out, becoming pivotal sellers of altcoins in the process.
Some altcoins are already feeling the heat. One of them is Solana (SOL), which is faltering under the looming asset sales. Another crypto caught in the fray is ApeCoin (APE), held by numerous VC investors. A scheduled unlock on Sept. 17 will release 11% of outstanding tokens, a scenario that previously saw prices decline by 24% when 4.2% APE was unlocked on Aug. 17. Given that the upcoming unlock is even more substantial, expectations are for an even harsher price reduction.
Let’s not forget Axie Infinity’s token (AXS), awaiting a sizeable unlock on Oct. 20, when another 11% will be released. The aftermath of its last equivalent occurrence on July 22 was a 32% price drop.
In light of these events, it’s crucial to consider volatility as an inherent risk in cryptocurrency investments. However, it’s also worth remembering that selloffs frequently create opportunities for investors who remain bullish about the blockchain’s future.
The implications of such vast asset sales raise questions about market stability but also highlight the potential room for maneuver. It’s a delicate balance that needs to be approached with skill and a clear understanding of the market dynamics at play. As always, for crypto enthusiasts and investors alike, the watchword remains vigilance, especially in these fluctuating market conditions.
Source: Coindesk
