Benzinga - Concerns have been raised regarding the potential market impact of FTX's (CRYPTO: FTT) liquidations on certain cryptocurrencies, in an analysis by a crypto analytics firm.
Messari's analysis highlights that while major cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) might be able to withstand the selling pressure, others like Dogecoin (CRYPTO: DOGE), Tron (CRYPTO: TRX), and Polygon (CRYPTO: MATIC) could face significant market turbulence.
This revelation comes ahead of the much-anticipated Benzinga's Future of Digital Assets conference on Nov. 14, where industry experts will discuss the evolving landscape of the crypto market and potential challenges ahead.
FTX liquidators currently hold an estimated $1.3 billion in liquid crypto assets, excluding stablecoins.
The looming fear is that potential liquidations might commence as early as Wednesday.
Among the largest holdings are Solana (CRYPTO: SOL), BTC, ETH, Aptos (APT), DOGE, TRX, and MATIC.
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Messari's report emphasizes that the primary concern isn't the total value of the tokens held by FTX, but their volume in relation to each asset's actively traded volume.
For instance, FTX/Alameda's holdings in BTC, valued at approximately $353 million, account for nearly 1% of BTC's weekly traded volume.
This suggests that the market can largely absorb the selling pressure for BTC, and similarly for ETH.
However, the scenario is different for DOGE, TRX, and MATIC.
These assets, being less liquid, could be significantly affected.
The $20-$30 million that FTX holds in these cryptocurrencies represents a substantial 6-12% of their weekly volumes, potentially leading to a higher market impact.
While SOL and APT have notable USD values and could influence market volume, these assets are primarily held by Alameda and venture entities.
A significant portion of these holdings consists of vesting tokens, which aren't immediately available for liquidation in open markets.
For SOL, only about $9.2 million will be unlocked monthly, minimizing the liquidation impact and aligning it more with the manageability seen with BTC and ETH liquidations.
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