The long-awaited FTX creditor payouts are set to begin today, February 18 after over two years of bankruptcy. This payment, which is the first batch, is targeted towards targeting smaller creditors. Nonetheless, the payout could have a few effects on the crypto industry, especially if creditors receive payouts in crypto.

A crypto analyst, Excavo, has shared his perspective on TradingView, highlighting the potential liquidity shifts that could follow FTX’s creditor payouts and the broader implications for Bitcoin and altcoins.

FTX Payouts Kick-Off: How Does This Affect The Crypto Market?

FTX has confirmed that creditor repayments will commence on February 18, starting with those in the convenience class category of creditors with claims of $50,000 or less. These creditors will receive full repayment plus an additional 9% annual interest accrued since November 2022, totaling approximately $1.2 billion in payouts. 

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For creditors with larger claims exceeding $50,000, distributions will begin in Q2 2025, with FTX planning to disburse $7 billion as part of a larger $16 billion payout in total. As noted by Excavo, the significance of these payouts extends beyond individual investors, as the redistribution of these funds could reshape liquidity flows across the crypto market.

If creditors receive payouts in crypto and decide to sell, it could create downward pressure on the market. However, most repayments are expected in cash, and it is now left to see how investors will reinvest them into the market. The first thought is that most of these repayments will go back into Bitcoin, which would trigger a Bitcoin price rally.

However, with billions set to enter the market, a significant portion could flow into altcoins, especially if Ethereum staking ETFs receive regulatory approval later in 2025. This aligns with speculation that an altcoin ETF wave could drive capital into other altcoins like Cardano, Dogecoin, XRP, and most especially Solana. Excavo’s analysis noted that the lack of liquidity rotation into altcoins has left many underappreciated, but this could change if a substantial portion of FTX repayments is redirected into the broader crypto market and not Bitcoin.

Will Bitcoin Crash Or Rally In Response To FTX Repayments?

The total FTX repayment to creditors is expected to be in excess of $16 billion, with most being cash repayments. The injection of billions of dollars could cause fresh buying pressure if reinvested into the market. You could argue that this is the general consensus among bullish investors.

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For example, some members of the Reddit crypto community have noted that they are eager to reinvest their FTX payouts into the crypto industry.  “It’s all getting degen’d straight back into crypto,” one Reddit user commented. 

With Bitcoin at the forefront of recent inflows into the market, the majority of the payout could as well easily go back into Bitcoin. Crypto analyst Excavo thinks otherwise, noting that most of the FTX repayments flowing back in will go into the altcoin market. 

At the time of writing, Bitcoin is trading at $95,300, down by 0.75% in the past 24 hours.

Featured image from Unsplash, chart from Tradingview.com

Defunct Japanese-based cryptocurrency exchange, Mt. Gox has taken the next steps toward its Bitcoin distribution process to customers who were previously affected by its 2014 hack attack. The crypto exchange has delivered mass emails to account holders as they confirm wallet addresses for individuals eligible for its repayment process. 

Mt. Gox Prepares For Bitcoin Repayments

Recently, Account holders at Mt. Gox reported in a Reddit post that they have been receiving new emails from the crypto exchange regarding an identity verification and confirmation procedure initiated by the exchange. 

Mt. Gox disclosed that it has begun confirming wallet addresses from users who had officially owned accounts at the crypto exchange and had successfully completed their identity verification processes. The crypto exchange also revealed that it would be distributing Bitcoin (BTC) and Bitcoin Cash (BCH) as part of its repayment process to account holders, with the payout ranging from 142,000 BTC to 200,000 BTC. 

Furthermore, Mt. Gox disclosed that the rehabilitation trustee has shared customer details with the custodian to facilitate the account verification process. The crypto exchange warned that customers with disabled or frozen accounts may not be eligible for the fund distribution program. 

In September 2023, Mt. Gox declared an extension of its repayment deadline from October 2023 to October 31, 2024, attributing the decision to the need for further discussions to ensure proper disbursement of funds. During December 2023, the crypto exchange encountered a slight hiccup in its payment distribution process after it announced it had unintentionally issued double payments to specific users. 

Following the error, Mt Gox urgently requested these users to return the excess funds, warning of potential legal consequences and the possibility of being excluded from the reimbursement plan scheduled later this year. 

This year marks nearly a decade since Mt. Gox suffered a hack attack resulting in the loss of a substantial 850,000 Bitcoin. Recent developments in the repayment process bring hope to former customers of the crypto exchange who were adversely affected by the cyber theft. 

BTC price reclaims $40,000 | Source: BTCUSD on Tradingview.com

BTC Faces $20,000 Crash If Mt. Gox Customers Commence Bitcoin Sell-Off

About 200,000 BTC presently worth over $7.7 billion, is expected to spread through multiple wallet addresses owned by Mt.Gox creditors. This raises concerns about the potential impact this Bitcoin distribution could have on the crypto market. 

Presently, Mt. Gox’s 200,000 BTC repayment amount surpasses the total value of Microstrategy and El Salvador’s Bitcoin holdings, which are among the largest in the world. 

With Bitcoin currently at $39,909, if Mt.Gox account holders receive their reimbursements and attempt a sell-off to take their profits, which have grown by a substantial 99,900%, the price of Bitcoin may dip below $20,000. This would be a monumental crash for the pioneer cryptocurrency, bringing prices back to half of their present market value. 

Featured image from Inside Bitcoins, chart from Tradingview.com

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

An investment firm YieldMax directed a request to the Securities and Exchange Commission (SEC) seeking regulatory approval for an exchange-traded fund (ETF) that offers monthly income tied to MicroStrategy derivatives. If granted the green light, the ETF is scheduled to launch in 2024 under the name Option Income Strategy ETF, with the ticker symbol MSTY.

YieldMax, the company behind the proposal, intends to structure MSTY as a “synthetic covered call” fund focused on MicroStrategy Inc (NASDAQ: MSTR), a publicly traded enterprise analytics software firm. Rather than directly holding MicroStrategy shares, the ETF would engage in options trading strategies involving MSTR derivatives.

How the Option Income Strategy ETF Is Expected to Work

Specifically, the fund would use investor capital to purchase call options on MSTR while simultaneously selling put options. The premiums collected from these options transactions would then be distributed to shareholders as monthly yields.

It is important to note that the yields would not be directly affected by increases or declines in the price of MicroStrategy stock itself. In fact, the ETF could potentially continue generating payouts even if MicroStrategy shares were to significantly decline. This divergence stems from the “synthetic” covered call approach, which focuses on options premiums rather than share appreciation.

Passive Income without Much Exposure to Risk

To mitigate potential losses during major downturns, monthly yields would be capped at a maximum of 15% returns. While this limits the upside for distributions, YieldMax believes that this trade-off offers a conservative path for earning passive income connected to crypto without directly owning Bitcoin.

Some investors argue that since interested parties could easily replicate the approach on their own, the strategy does not warrant a dedicated fund. Nonetheless, yield-focused exchange-traded funds (ETFs) are frequently promoted as straightforward ways for cautious investors to outperform bonds or savings accounts in terms of returns.

However, it still contains its risks that you must consider if you want to be involved in such investments. First is the market risk, which is a crucial factor as the value of the ETF may decline following the broader market or sector downturns. Derivatives, such as options, introduce additional risks like counterparty risk if the other party fails to meet obligations, as well as liquidity risk due to potential difficulties in selling assets.

Concentrating solely on MicroStrategy derivatives brings about concentration risk, exposing investors to the specific volatility associated with that company. Regulatory changes or legal issues affecting MicroStrategy could also have an impact on the performance of the ETF. Additionally, relying on fund managers introduces operational risks that should be taken into account.

YieldMax currently offers 18 other ETFs that employ options strategies centered around various underlying assets. By introducing a fund related to MicroStrategy and Bitcoin, the firm likely aims to differentiate itself in the competitive ETF landscape.

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Bitcoin News, Blockchain News, Cryptocurrency News, Funds & ETFs, Market News

• Cryptocurrency has transformed the casino withdrawal process.
• Crypto casinos are leveraging the power of blockchain tecchnology and cryptocurrencies to prioritize user privacy. 
• Cryptographic algorithms and smart contracts are helping ensure provably fair gaming.

In recent years, the world of online gambling has undergone a profound transformation with the advent of crypto casinos. These innovative platforms have brought about a wave of change, revolutionizing the way payouts are processed, privacy is upheld and fairness is ensured in the realm of online gaming. 

How cryptocurrency transforms the casino withdrawal process

Traditional online casinos often present challenges when it comes to the speed and security of withdrawals, leaving players frustrated with lengthy processing times and potential vulnerabilities. However, with the rise of crypto casinos, players can now experience a seamless and efficient withdrawal process. Zamsino’s research on crypto technology in online casinos has shed light on the transformative potential of crypto technology, highlighting its ability to revolutionize payments. 

By leveraging blockchain technology, transactions are conducted directly between the player and the casino, eliminating the need for intermediaries and reducing the processing time significantly. The decentralized nature of cryptocurrencies ensures that funds are securely transferred, providing players with peace of mind and prompt access to their winnings. 

The anonymity features of crypto casinos

At the core of crypto casinos lies a paramount focus on privacy, offering players an unprecedented level of anonymity in their gambling activities. 

Unlike traditional online casinos that often require personal information for registration and transactions, crypto casinos leverage the power of cryptocurrencies to prioritize user privacy. By using pseudonymous transactions through blockchain technology, players can enjoy a heightened sense of confidentiality. Personal details are not linked to the transactions, shielding players from potential privacy breaches and identity theft. 

The anonymity features of crypto casinos empower individuals to gamble without the fear of their personal information being compromised, providing a safe and discreet environment for online gaming.

The role of blockchain technology in ensuring provably fair gaming

With the emergence of blockchain technology, the concept of fairness in online gaming has been redefined, leading to the advent of provably fair gaming in crypto casinos. Traditional online casinos have often faced skepticism regarding the fairness of their games, leaving players uncertain about the integrity of their outcomes. However, blockchain technology has introduced a groundbreaking solution. 

Through cryptographic algorithms and smart contracts, players can independently verify the randomness and fairness of each game’s outcome. 

Transparent and immutable records stored on the blockchain provide an auditable trail, ensuring that the casino cannot manipulate the results. This innovative approach has instilled a new level of trust among players, allowing them to engage in online gambling with confidence.

By leveraging the power of cryptocurrencies and blockchain technology, crypto casinos have emerged as a secure, transparent and decentralized alternative to traditional online casinos

• Coinbase yesterday evening announced it was suspending ETH staking reward payouts.
• The crypto exchange has been having some issues with ETH staking recently.
• The exchange, however, expects to resolve the issue within 48 to 72 hours.

In a statement issued on the exchange’s website on May 16, Coinbase announced that it was temporarily pausing issuing Ethereum (ETH) staking reward payouts.

The exchange is currently investigating the issue following the temporary halt.

ETH rewards stuck

There was an issue on Coinbase with ETH rewards Last week. ETH rewards became stuck because of the lack of support for ETH addresses from external validators in its systems. 

The hiccup made the crypto community frustrated with a majority venting their anger on social media platforms.

Besides issues with ETH staking rewards, a significant number of withdrawals were also stuck in the withdrawal queue.

While the recent Ethereum Shapella upgrade had a number of positive implications for ETH holders, the ability to withdraw staked ETH seems to be putting pressure on most ETH-staking platforms.

Coinbase has recently received over 53,400 ETH deposits with a significant portion of these deposits coming from Coinbase’s cbETH deposit address. The address witnessed a withdrawal of 44,000 ETH, which was transferred to the Coinbase 10 wallet address, according to CryptoQuant data.

Bitcoin News: Bitcoin, the world’s largest crypto’s price is on a constant decline as the digital asset market is under heavy turbulence. Crypto investors have looked hesitant to indulge in the trade keeping future events in sight. As a such event, Mt Gox Bitcoin Payout has been hounding the crypto market.

Mt Gox Bitcoin Pay Out Postponed

As per reports, a probable black swan event, Mt Gox Bitcoin pay out has been delayed for now. The Mt Gox creditors were set to receive almost 138K Bitcoins as an “early repayment” scheduled on March 10. The total worth of the Bitcoins to be distributed among the creditor was calculated to be around $3 billion.

According to the rehabilitation letter issued by Mt Gox stated that the trustee has decided to change the deadline for the payout to April 6, 2023. It mentioned that the court has granted the Trustees to postpone the repayment deadline.

It added that the early lump sum repayment deadline and intermediate repayment deadline were scheduled to be from October 31 to September end. Meanwhile, the new order will allow the trustee to repay creditors between April 6 to October 30, 2023. Read More Bitcoin News Here…

Bitcoin price has dropped by more than 7% in the last 7 days over the speculation of the Mt Gox Bitcoin release. Bitcoin is trading at an average price of $21,650, at the press time. As per speculations, the Mt Gox pay out would have triggered a massive sell off in the crypto market.

Nearly 40,000 Bitcoins Belonging to US Government Are on the Move| Read More Here…

Ashish believes in Decentralisation and has a keen interest in evolving Blockchain technology, Cryptocurrency ecosystem, and NFTs. He aims to create awareness around the growing Crypto industry through his writings and analysis. When he is not writing, he is playing video games, watching some thriller movie, or is out for some outdoor sports. Reach me at [email protected]

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

ETFs have been trading in the United States, Canada, and some other countries for a while now. These ETFs have made strides so far with high volumes traded in throughout their existence in the market. However, none of these ETFs have offered mostly dividends to their investors. An asset management firm in Canada has now made history as the first to offer a monthly yield to those invested in its ETF.

Edging Towards The Future

Purpose Investment has first made headlines in February when it created the first North American ETF that tracks the price of Bitcoin. This time around, the investment firm has made another stride in becoming the first to launch an ETF that pays monthly yields to investment. This puts Canada at the front of the race when it comes to crypto ETFs and the purposes which they serve.

Related Reading | Market Analysts Explain Why This Correction Is Good For Bitcoin

The Bitcoin and Ethereum ETF will offer investors monthly yields using a derivatives-based covered call strategy. Like the ETFs, the strategy is another first of its kind in the crypto market.

The annual yield of the ETFs is also attractive according to estimates. Market experts explained that although there is no way to guarantee what the amount would be each month, it is expected to be the equivalent of 8% to 10% annual yield, with 1.10% going to the firm as a management fee.

BTC trending south of $57K | Source: BTCUSD on TradingView.com

Canada is ahead of the U.S. in the ETFs market and currently has approved Ethereum ETFs whereas the latter is still yet to approve its first Ethereum ETF. Both Bitcoin and Ethereum ETFs offered by Purpose Investment will pay out similar yields and are classified as income in non-registered accounts.

ETFs Making Waves

ETFs have offered investors a way to get exposure to the cryptocurrency market without having to purchase any of the digital assets themselves. The anticipation for their approval shone through with the first-ever Bitcoin ETF approved in the United States, the ProShares Bitcoin Futures ETF, which saw over $1 billion in trading volume after the first day.

Related Reading | Over 1 Milllion ETH Has Been Burned Since Ethereum EIP-1559

ETFs, however, do not shield investors from the highly volatile nature of the market. For the Purpose Investment ETFs, investors are shielded to a certain extent by these fluctuations. They will enjoy the benefits of monthly yields, but will also see limited capital gains compared to those who do not for this reason.

“Given the connection between the volatility of the underlying asset and premiums, covered call strategies on cryptocurrencies offer unique exposure to a unique asset class, providing investors a high yield without sacrificing significant price participation.” – Vlad Taveski, COO & Head Of Product, Purpose Investments

Tasevki told “Yahoo Finance Canada” that investors are allowed to choose if they wish to earn these monthly yields on their investors. It is a way to generate short-term income using covered calls on assets which they believe in.

Featured image from Investment U, chart from TradingView.com