Coinbase Report: FTX's Cryptocurrency Holdings Sale Unlikely to Significantly Impact the Market

Coinbase stated in a research report that the sale of its cryptocurrency holdings by FTX is unlikely to have a significant impact on the market due to several mitigating factors.

The report mentioned that, first and foremost, the token sale would not create sudden massive selling pressure on the market. The initial phase of liquidation limits is set at $50 million per week and will then increase to $100 million over the following weeks. Coinbase noted that approval from the committee representing FTX debtors would be required to permanently raise the trading limit to a maximum of $200 million per week.

Furthermore, David Duong, the Head of Institutional Research, wrote that FTX maintains strict controls on the sale of tokens with certain “internal affiliations,” requiring a 10-day advance notice to the committee. As part of the token redemption plan, a significant portion of FTX's holdings in SOL will be locked until 2025, and the same applies to other tokens that need to be sold.

Finally, the report added that once committee approval is obtained, FTX will have the ability to hedge its sales of BTC, ETH, and other tokens through investment advisors.