The bankrupt crypto exchange FTX will see a large-scale token unlocking on 3/1, according to KOL Ai Shi, with as many as 12.2 million SOL tokens, worth about $206 million, being unlocked. Based on past experience, the FTX bankruptcy team may hold a new round of auctions in the near future, and FTX has previously held three SOL token auctions, all of which were won by whale institutions at a significant discount, with very impressive returns.
Past Auction Records
FTX began auctioning off its SOL tokens in March 2024 to pay off its massive debts, and the three sales records have also been compiled and exposed, with Galaxy Digital, Pantera Capital, and Figura Market winning the auctions, with the detailed auction prices and profits as follows:
- Galaxy Digital: Purchased 25.52 million SOL at $64 in late March 2024, with a return of 187%
- Pantera: Purchased 13.67 million SOL at $95 in early April 2024, with a return of 93%
- Figure: Purchased 1.8 million SOL at $102 in late April 2024, with a return of 80%
All three were sold at over 40% discounts, indicating that the FTX bankruptcy team was very eager to raise funds at the time.
Will it compensate users, and what will happen at the auction?
Although the unlocking and auction have not yet arrived, according to the previous explanations of the FTX bankruptcy committee, the unlocked tokens and investment profits belong to the "atypical investment creditors", which means they are unrelated to the compensation for ordinary creditors starting on 2/18, and past FTX victims will not receive more compensation.
However, an anonymous expert from Docu also reminds that since this auction will be launched after the 2/18 compensation, the FTX bankruptcy team should not rush to auction off the SOL tokens at low prices as they did before.
Given the recent market heat and liquidity of SOL, as well as the estimated scale of market makers, experts estimate that a reasonable price for this auction would be around 70-80% of the market price, indicating that this auction will not be as "profitable" as before.
Will it crash the market? Potential market factors
Experts also remind that the past three auction winners did not see large-scale token dumping, mainly because their purchase prices were low enough and they had enough long-term holding incentives. However, if the new buyers obtain the tokens at a price very close to the market price, they may not have the same long-term holding motivation and may choose to exit the market in batches when the market conditions are favorable enough.
If the $206 million buyer decides to exit the market in batches, SOL may experience a significant price ceiling in the short term, and there may be a significant downward breakthrough and selling pressure after the market breaks through the target price. Experts warn that although the auction has not yet been held, the market may undergo an anticipatory adjustment, and it is recommended to avoid long SOL positions.
