Crypto markets dipped on Monday morning ahead of a major liquidation of FTX assets.
- The prices of major cryptocurrencies dipped on September 11.
- Between 10:20 and 10:30 UTC, Bitcoin, Ether, BNB, XRP and others all dropped sharply.
- Investors are currently nervous ahead of the anticipated unlocking of a cache of crypto from FTX.
- The failed exchange was preparing to request approval for liquidating $3.4B worth of cryptocurrencies on Wednesday, September 13.
The prices of major cryptocurrencies simultaneously took a dive shortly after 10:00 am (UTC) on Monday, September 11.
With BTC, BNB, ETH, and XRP all down, what caused the latest market slide? Fears over the impact of an expected multibillion-dollar liquidation of FTX assets could be behind the sudden price drop.
Major Cryptos Slide on Monday Morning
Between 10:20 and 10:30, the price of Bitcoin fell from $25,790 to $25,680. In the same ten minutes, Ether dropped more substantially from $1606 to 1590.
Of course, a decline of around 1% is far from the most dramatic crash in the history of crypto. But markets are spooked nonetheless.
The global crypto market cap has declined 1.23% over the course of the past day. More worrying still, every one of the top fifty cryptocurrencies has clocked a loss in the previous 24 hours.
FTX Prepares to Liquidate $3.4B Worth of Cryptocurrencies
One potential reason behind Monday’s market dip is the anticipated liquidation of cryptocurrencies locked up during FTX’s insolvency proceedings.
Lawyers for the company are set to appear in Delaware Bankruptcy Court on Wednesday, September 13, to request approval for liquidating $3.4B worth of cryptocurrencies.
Once approved, the assets have the potential to create downward price pressure as freshly liquidated cryptocurrency floods the market.
And while that might hardly dent Bitcoin’s market capitalization, lower market-cap altcoins could respond negatively to the increased supply.
For example, FTX holds Solana (SOL), valued at around $685 million.
Suggesting a correlation between the volume of assets held by FTX and the respective tokens’ price performance, SOL has lost nearly 10% of its market value in the past week.
The silver lining for Solana investors is that the bulk of the SOL tokens held by FTX debtors can’t be sold immediately.
While FTX does hold a large percentage of the total SOL supply, most of it is still locked and will be fully vested in 2028.
