FTX's Ticking Time Bomb: Dogecoin, Tron, And Polygon May Face Brutal Shockwave

Zinger Key Points
  • DOGE, TRX, and MATIC's liquidity could be significantly impacted, representing 6-12% of their weekly volumes.
  • While SOL and APT have notable values, their market impact is minimized due to vesting tokens.

Concerns have been raised regarding the potential market impact of FTX's FTT/USD liquidations on certain cryptocurrencies, in an analysis by a crypto analytics firm.

Messari's analysis highlights that while major cryptocurrencies like Bitcoin BTC/USD and Ethereum ETH/USD might be able to withstand the selling pressure, others like Dogecoin DOGE/USD, Tron TRX/USD, and Polygon MATIC/USD 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 SOL/USD, BTC, ETH, Aptos (APT), DOGE, TRX, and MATIC.

Also Read: Bitget's Ambitious $100M Fund To Invest In Regional Exchanges, Data Analytics Firms, Media Entities

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.

Read Next: SEC Chair Gensler Calls Crypto A 'Field Rife With Fraud, Abuse And Misconduct'

Meet and engage with transformative Digital Asset and Crypto business leaders and investors at Benzinga's exclusive event - Future of Digital Assets. Tickets are flying-  get yours!

Photo: Unsplash

Market News and Data brought to you by Benzinga APIs
Posted In: CryptocurrencyNewsMarketsAlamedacrypto assetscrypto marketcryptocurrency marketFTX
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!