As the Bitcoin (BTC) market continues to display sluggish performance beneath the $100,000 mark, a number of crucial events this week could potentially stir up some activity in the market.
FTX Payouts Begin
FTX, once the third-largest digital asset exchange globally, is set to initiate its first wave of creditor payouts following its business failure in late 2022. The first in line are the Convenience Class creditors, those claiming a maximum of $50,000. They will receive a full repayment along with a 9% annual post-petition interest.
There is a widespread expectation that these funds will be reinvested into the market, boosting valuations across the board. However, this view is not universally held.
"FTX plans to distribute around $1.2 billion to Convenience Class creditors," said Markus Thielen, the founder of 10x Research, in a client note on Monday. He believes this amount is "insufficient to make a significant impact."
Thielen suggests that only $7 billion from the remaining $10.5 billion earmarked for larger creditors might be available for potential cryptocurrency investments. Furthermore, he predicts that only half of this $7 billion might re-enter the market, leading to a net inflow of slightly over $3 billion – equivalent to a single month of net inflows into the Bitcoin market.
Mena Theodorou, co-founder of the crypto exchange Coinstash, anticipates that smaller creditors will invest some of their funds into Solana.
"Given FTX’s historical investment patterns in SOL and the Solana ecosystem, it’s probable that a portion of these funds will be redirected back into the network. Given SOL’s impressive performance in the past year – a rise of over 500% – and strong on-chain activity and developer growth continuing to drive demand, it’s likely that SOL could potentially outperform the broader market," Theodorou stated in an email.
A Conversation with Trump and Musk
U.S. President Donald Trump and billionaire investor Elon Musk will participate in a discussion hosted by Fox News anchor Sean Hannity, as announced by the network on Friday. Topics of discussion may include politics, tariffs, immigration, and possibly digital assets, which could create market volatility.
Theodorou from Coinstash commented, "On February 19, Trump will engage in an exclusive interview with Elon Musk on Fox News. Given Trump’s growing interest in crypto and Musk’s established connections to the industry, this conversation could result in market volatility, especially if topics like policy, regulation, or institutional adoption are discussed."
The Trump administration’s recent announcement that it would evaluate the feasibility of a strategic BTC reserve has left those expecting immediate action on the campaign promise feeling let down.
Federal Reserve Meeting Minutes
On Wednesday, we will see the release of the minutes from the Federal Reserve’s January meeting in which interest rates were maintained steady. The bank stated it saw no urgency to reduce rates and would like to observe further progress on inflation.
These minutes are expected to reiterate this stance, particularly as the Consumer Price Index (CPI) and Producer Price Index (PPI) for the month were higher than expected, weakening the argument for a rate reduction boost to the U.S. economy. Additionally, Trump’s tariffs continue to pose a risk of inflation.
Investors will scrutinize the minutes to determine if policymakers found the policy restrictive, implying the next move could still be a rate cut. If the minutes suggest otherwise, we might witness volatility in bonds that could potentially impact risk assets, including cryptocurrencies.
Consensus Hong Kong Conference
Kicking off on Tuesday is CoinDesk’s Consensus Hong Kong, a three-day event focused on cryptocurrencies and blockchain.
Featuring over 270 speakers and attendees from more than 90 countries, the event promises to provide unique insights into blockchain technology and digital asset investment in Asia, and could potentially influence market movements.
