FTX Liquidations Could Affect Altcoin Prices
According to crypto analytics firm Messari, the impending liquidations on FTX could potentially lead to price declines for three altcoins. Messari highlights the significant holdings of FTX and Alameda in the following cryptocurrencies:
- Dogecoin (DOGE): $37 million
- Tron (TRX): $33 million
- Polygon (MATIC): $22 million
Messari emphasizes that it’s not just the absolute value of these token holdings that matters, but their relative size compared to the weekly trading volumes of each asset. For instance, FTX/Alameda’s holdings of Bitcoin (BTC) amount to $353 million, which is approximately 1% of BTC’s weekly trading volume. This means that the market can likely absorb most of the selling pressure without causing significant disruptions. The same principle applies to Ethereum (ETH).
However, for DOGE, TRX, and MATIC, which have lower liquidity, the $20-30 million that FTX holds represents a substantial 6-12% of their weekly trading volumes, potentially leading to more significant market impacts.
Current Prices of the Mentioned Altcoins
As of the time of writing this article:
- DOGE is trading at $0.0613. It is currently ranked 9th by market capitalization and has seen a gain of more than 1.5% in the past 24 hours.
- TRX is trading at around $0.0815. It is ranked 11th by market capitalization and has experienced a price increase of over 5% in the past day.
- MATIC is trading at $0.511. It holds the 14th position by market capitalization and has registered a 1.75% gain in the last 24 hours.
Messari also points out that Alameda holds substantial positions in other cryptocurrencies:
- Layer-1 blockchain Solana (SOL): $720 million
- Layer-1 blockchain Aptos (APT): $66 million
However, it’s worth noting that most of these holdings consist of vesting tokens and will be liquidated gradually, likely mitigating their impact on prices.
