Key Notes

Key Notes:

Payments will begin today at 3:00 pm UTC, representing the first step in a distribution process aimed at restoring confidence in the crypto ecosystem.The valuation of assets based on November 2022 prices has frustrated creditors, considering Bitcoin has increased 390% since the bankruptcy filing.Analysts suggest this payment process could positively impact the crypto market, though many creditors with larger claims will continue waiting for future distributions.

The first round of repayments to FTX creditors begins today, marking a crucial moment for those who lost funds in the $9 billion collapse of the crypto exchange. The Bahamian arm of FTX, which was caught in the crossfire when the company fell apart in 2022, will begin reimbursing users with claims under $50,000.

Tomorrow, Feb 18, 2025, at 10 AM ET, is the 1st distribution of FTX repayments$1.2B will be distributed:– 28.75% of that didn’t do KYC– 33.33% are claim buyers who likely won’t invest in crypto – leaving only ~$400M (original holders)Don’t believe all the fake info from… pic.twitter.com/ValqNFXfyg

An estimated $1.2 billion will be distributed, restoring some faith in the industry’s ability to recover from what was one of the most devastating financial implosions in cryptocurrency history. Payments will be issued at 3:00 pm UTC, according to an update shared on February 4 by FTX creditor Sunil.

While the return of funds is a victory for many, not all creditors are celebrating. The repayment model values their holdings based on cryptocurrency prices at the time of bankruptcy in November 2022, when Bitcoin was trading at around $20,000. Since then, the price has surged by over 390%, meaning some creditors feel shortchanged.

Magdalena Hristova, public relations manager at Nexo, highlighted that this repayment represents more than just money – it’s about restoring confidence.

“For retail investors, especially those without diversified portfolios, these repayments offer not just the return of funds but a sense of stability and peace of mind,” she explained.

However, given that only creditors with claims below $50,000 are being reimbursed in this first phase, many affected users will still be waiting for clarity on when they’ll see their money. The impact of these repayments on the broader cryptocurrency market remains uncertain, with many recipients expected to opt for safer investments instead of reinvesting in crypto.

According to Bitget Wallet’s Chief Operating Officer, Alvin Kan, the $1.2 billion payout could positively influence the crypto market. He believes a significant portion might be reinvested into cryptocurrencies, impacting liquidity and prices.

“The scale of this repayment marks a notable event in terms of both capital flow and the psychological impact on crypto investors,” he told Cointelegraph.

Traders and analysts are debating where the funds will go. A trader known as “hansolar” pointed out that some recipients will likely use the money for debt repayments or liquidity needs. He noted that speculative assets like meme coins and Solana SOL $173.2 24h volatility: 3.3% Market cap: $84.70 B Vol. 24h: $2.58 B are facing fatigue, while Ethereum ETH $2 769 24h volatility: 5.0% Market cap: $333.82 B Vol. 24h: $18.23 B has remained relatively stagnant.

Meanwhile, AI-related tokens have experienced a 90% drop, reinforcing the trend of retail investors following hype cycles rather than buying during downturns. Given these conditions, Bitcoin BTC $96 656 24h volatility: 1.3% Market cap: $1.92 T Vol. 24h: $17.95 B is expected to be the biggest beneficiary of the redistributed capital.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.

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