coinedition.com
Crypto trader and analyst MartyParty recently posted a tweet exploring the potential impact of FTX’s expected dumping of SOL on centralized exchanges. On September 13, Judge John Dorsey announced that bankrupt crypto exchange FTX is now approved to sell $3.4 billion in SOL, ETH, BTC, and other digital assets, at the U.S. Bankruptcy Court for the District of Delaware.
According to a court filing that surfaced on Monday, FTX holds $1.16 billion in SOL, $560 million in bitcoin (BTC), $192 million in ether (ETH), and $137 million in aptos (APT). FTX’s SOL holdings exceed one-third of the company’s overall liquid cryptocurrency portfolio, valued at $3.4 billion.
While the expected sale of FTX assets has become the subject of FUD on social media, some prominent voices are arguing that actively clarifying that a sell-off of SOL, at least, should cause a significant dip. X (Twitter) user MartyParty highlighted that a wallet owned by FTX sister company Alameda has the rights to 26,740,743 staked SOL, which cannot be unlocked before 2025. Moreover, the FTX liquidation will only feature the sale of the wallet keys, not the contents of the wallet.
MartyParty emphasized that, excluding the aforementioned staked tokens, FTX and its sister company Alameda only possess a total of 7 million SOL and WSOL, which have already been committed for pre-sale to the Solana Foundation. Therefore, “There is no more Solana to sell,” noted the trader.
Furthermore, MartyParty explained that Solana’s average 24-hour volume, which stands at 350 million to 450 million, is more than able to absorb the FTX liquidation. In comparison, even if FTX were to liquidate their entire $SOL holdings from their wallet at today’s market price, it would only amount to $128.6 million. Additionally, even if all tokens were unstaked, the weekly limit for selling is capped at $100 million. This means that even at the maximum selling capacity, it would take $2.5 billion in total volume over the course of a week, assuming a price of $18 per SOL. He concluded,
No liquidation event has event dented a crypto. Its just a naritive used to get your to sell. [sic] Exchanges are hungry for inventory and will gobble it up and sell it back to you later at 2x the price.
Crypto expert Michael van de Poppe concurred with MartyParty’s argument. However, his figures varied slightly, including FTX’s maximum weekly sale limit, which as per Poppe is $200 million worth of assets.