Justin Sun of Tron contemplates an offer for FTX's holding tokens as crypto markets bend to FUD
- Tron founder Justin Sun has expressed consideration to purchase FTX’s holding tokens and assets intended to reduce FUD-induced selling pressure.
- Sun’s comment comes ahead of the Omnibus Hearing on September 13, likely to see FTX’s holdings offloaded to the market.
- Some are calling it a second example of Sun’s “savior syndrome”.
- In the first, the Tron founder offered to purchase BTC from the US government in the Ulbricht case.
Justin Sun, founder of the Tron blockchain has hinted at the possibility of purchasing defunct crypto exchange FTX’s holdings, as the cryptocurrency market keeps eyes peeled ahead of the Omnibus Hearing scheduled for September 13.
Also Read: Solana price crash and FTX hearing: A complete rundown
Justin Sun may have an offer in mind for FTX
Justin Sun has revealed in a post on social media platform X that he is considering “an offer for FTX's holding tokens and assets,” even as concerns spread over the potential impact on the market should the court allow FTX to liquidate its assets.
Contemplating an offer for FTX's holding tokens and assets to reduce their selling impact on the crypto community. Let's unite to bolster our crypto ecosystem!
— H.E. Justin Sun 孙宇晨 (@justinsuntron) September 11, 2023
As per the post, Sun foresees an impending selling impact on the crypto community if FTX offloads its assets to the market. Solana (SOL) price is already falling, bearing the brunt of an expected dump, as token holders anticipate increased supply if the bankrupt exchange gets the green light to liquidate.
As FXStreet reporter Aaryamann Shrivastava reported, Solana accounts for a huge chunk of FTX’s bankrupt estate, accounting for up to $1.16 billion out of the total $7 billion. Of the FTX holdings, Bitcoin (BTC) totals about $500 million, while the rest is a variety of other tokens.
Justin Sun’s “hero syndrome” lives on
Notably, this is not the first time Sun has expressed intention to come to the rescue of the market as it eyes a certain sell-off. During late March, the Tron executive offered to buy Bitcoin at a 10% discount in an Over-The-Counter (OTC) deal with the US Government which said it was planning to sell around 41,500 BTC tokens.
US government has announced its intention to sell an additional 41,500 #BTC this year. To minimize the potential impact on the market, I would like to offer to purchase these BTC at a 10% discount for an OTC deal.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 31, 2023
His reasons remain the same: to cushion the market from imminent impact. A purchase OTC – which means outside of the regular market – would have little (if any) impact on the market price. In a recent post on BlackRock, we explained how large holders or whales (institutional investors) capitalize on OTC transactions to increase their holdings while sparing the market from a resounding impact.
Mark Helfman, a Bitcoin writer, explains how institutional investors go through custody solutions like OTC to hide their activities. He says, “They find a broker for a private sale and settle the exchange in batches.” This is what Sun would ideally do to spare the market from impact.
…brokers are not obligated to report private deals, it’s difficult to know who’s moving money where without forensic technology or an insider who knows about the deal.
For this reason, Sun’s transaction could spare the assets or holdings he acquires from recording price dips around the anticipated liquidation.
Also Read: FTX exchange’s motion to convert crypto to fiat could make or break the payback plan in September 13 hearing.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
