The long-anticipated distribution of repayments to FTX creditors commences today, February 18, after more than two years of bankruptcy proceedings. This initial disbursement primarily targets smaller creditors. The payments could impact the cryptocurrency landscape, particularly if distributed in digital currencies. Analyst Excavo offers insights on TradingView, addressing potential liquidity changes stemming from these payouts and their broader implications for Bitcoin and altcoins.

FTX has confirmed that repayments to creditors will begin from February 18 for the 'convenience class' creditors with claims of $50,000 or less. These creditors will receive their full due and an added 9% annual interest from November 2022, equating to approximately $1.2 billion in total payouts.

For those with larger claims over $50,000, distributions are scheduled to start in the second quarter of 2025, with a plan to disburse $7 billion as part of a larger $16 billion payout initiative.

Excavo emphasizes that these payments could influence liquidity dynamics beyond individual portfolios, reshaping the overall crypto market landscape. If these payouts are issued in cryptocurrency and subsequently sold, it could exert downward pressure on the market. The expectation remains that most funds will be disbursed in cash, leaving open the question of how recipients might reinvest in the market, potentially sparking a Bitcoin rally.

Yet, with billions potentially entering the market, a significant portion might flow into altcoins, particularly if Ethereum staking ETFs garner regulatory approval in 2025.

This scenario aligns with speculation that an altcoin ETF wave could channel investments into other altcoins such as Cardano, Dogecoin, XRP, and notably Solana. Excavo asserts that the historical lack of liquidity rotation into altcoins has left many undervalued, but this trend could shift if substantial FTX repayments make their way into these markets.

The anticipated FTX repayments exceed $16 billion, predominantly in cash. This capital influx could elevate buying pressure if reinvested in the market, aligning with bullish investor sentiment. Members of the Reddit crypto community have expressed eagerness to reinject their FTX recoveries into the industry, with one member stating, "It’s all getting degen’d straight back into crypto."

While Bitcoin currently stands as a prominent recipient of recent market inflows, Excavo suggests the majority of these funds might favor the altcoin market. At present, Bitcoin trades at $95,300, marking a 0.75% decline over the past 24 hours.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.