Matrixport Predicts Impending Altcoin Market Downturn
FTX is not the only significant player involved in divesting cryptocurrency assets; venture capital (VC) funds are also contending with the obligation to reimburse their investors, as per a recent report.
Matrixport's recent findings indicate that FTX is slated to offload approximately $3.4 billion worth of cryptocurrency to facilitate the return of conventional currency to its users, rather than tokens. This considerable divestment is poised to cast a shadow over the altcoin market for the rest of the year.
FTX has publicly declared its intention to liquidate roughly $200 million worth of crypto assets on a weekly basis. This indicates that the beleaguered crypto exchange will persist in these asset sales until the culmination of 2023.
Furthermore, FTX is not the exclusive major seller in the crypto sphere. The report underscored that "Venture capital (VC) funds specializing in crypto are also under immense pressure to refund their investors." These VC funds are projected to remain prominent sellers of altcoins as they endeavor to convert their holdings into cash.
The impending divestment of crypto assets has already started to impact specific altcoins. For instance, Solana (SOL) has experienced a downturn due to potential sales by FTX. However, SOL is not the solitary altcoin exposed to this scenario.
ApeCoin (APE), another cryptocurrency held by VC investors, is slated for an unlock on September 17, representing 11% of its total outstanding tokens. Following a prior unlock event on August 17, which released 4.2% of APE tokens, prices witnessed a decline of 24%. Given the larger proportion being unlocked this time, further price drops are anticipated.
Another substantial unlocking event is scheduled for October 20, concerning the token of Axie Infinity (AXS), with 11% of its tokens set to be released. Following a similar event on July 22, AXS experienced a 32% decline, according to the report.
In summary, the cryptocurrency market is currently witnessing considerable divestments by major players like FTX and VC funds, which may exert potential downward pressure on altcoin prices, particularly those with impending unlock events.