FTX is gearing up to distribute $5 billion in cash to creditors starting May 30, 2025, as part of its court-approved Chapter 11 reorganization. While this marks a major milestone in one of crypto’s biggest bankruptcies, market watchers are raising concerns:
Could this influx of funds cause Bitcoin (BTC) prices to dip in the short term?
Although the repayments are being made in fiat not crypto, there are several indirect factors that could put bearish pressure on BTC in the days and weeks following the payout.
1. Crypto-Native Claimants May Rebuy & Sell
Many FTX creditors are crypto-savvy investors. Once they receive their cash repayments, a portion may decide to re-enter the crypto market, buying Bitcoin or other assets. However, given BTC’s recent surge above $100,000, some may look to take short-term profits, adding volatility or downward pressure to the market.
2. “Sell the News” Reaction
In financial markets, positive events often result in the opposite reaction once the actual news materializes. Traders may see the start of repayments as a cue to lock in recent BTC gains, anticipating that others might sell. This classic “sell the news” pattern could briefly push BTC lower despite overall positive sentiment.
3. Institutional Outflows into Traditional Assets
Some institutional creditors could use the recovered cash to diversify away from crypto, choosing safer investments such as bonds or tech stocks. This reallocation of capital might dampen demand in the crypto space and reduce buying momentum in Bitcoin.
4. Market Uncertainty Amplifies the Risk
FTX’s payout comes at a time when global markets remain sensitive to inflation data, interest rate changes, and regulatory developments. Any combination of external pressure plus the psychological effects of the FTX repayment could trigger a market cooldown.
Is a Crash Coming?
Not likely. While a short-term dip is possible, the repayments are being made in cash ,not crypto, meaning there won’t be a wave of forced BTC sell-offs. Furthermore, long-term Bitcoin holders and institutional backers remain optimistic, with year-end forecasts still targeting $150,000–$200,000 from some analysts.
Final Thoughts
FTX’s second phase of repayments may cause temporary price dips in Bitcoin, driven largely by investor psychology and capital reallocation. But given the strong fundamentals and growing institutional support behind BTC, any pullbacks are more likely to present buying opportunities than signal a long-term reversal.
Watch closely around May 30 : BTC’s short-term volatility could offer critical insights into how resilient the crypto market really is.
