Arca's Chief Information Officer, Jeff Dorman, summarized key information regarding the court-approved sale of cryptocurrency assets by FTX on the X platform as follows:
The winning bidder is Galaxy Asset Management, not their trading division. They must act as trustees and sell gradually and opportunistically.
Galaxy has received numerous reverse inquiries (some from real funds and some from pre-investigation). However, the asset sale will primarily take place over-the-counter (OTC) and is unlikely to involve bulk sales via exchanges or time-weighted average price (TWAP). They will participate as long as there are good bids.
The $100 million weekly limit is not really relevant. If they receive higher bulk bids, they can request court approval, and they are not obligated to sell any assets in any given week. The $100 million is just a guideline to prevent forced sales and damage to the value of the crypto assets.
Hedging will be opportunistic (e.g., taking bearish options positions to offset significant portfolio declines). Some believe that Galaxy may be eager to sell $3 billion in futures, which is quite aggressive. Their goal is to outperform the performance of a static portfolio, not to turn bankruptcy funds into long/short (L/S) funds.
Galaxy cannot engage in insider front-running and profiting, which is illegal. Their asset management business is completely separate from the Prop desk and Novogratz (CEO of Galaxy Digital)s PA. This is not an immature plan; they have fought in court for months to win this business and won't risk it.
Bankruptcy takes a long time, especially for complex companies like FTX. Their goal is to maximize company assets, not the speed of distribution. This may limit short-term gains from speculative selling but is not a fire sale.
If the sale indeed happens quickly, it's because the market is bidding and there's demand to absorb it, which implies bullishness. If there's no bidding, the sale will slow down, which also implies bullishness (or at least no negative impact).
So, you can trade as you please and assess what you want. However, this sale process will be highly controlled and opportunistic, possibly slow and painful but extremely orderly.
In recent news, the court has approved FTX's multi-billion-dollar cryptocurrency liquidation plan, with an initial weekly sales limit of $50 million, subsequently increasing to $100 million per week.