FTX has been granted approval to sell a whopping $3.4 billion worth of crypto assets. The news comes at a time when markets are holding relatively steady, defying expectations of a massive sell-off. Michaël van de Poppe, CEO and Founder of MN Trading shared insights into this development.
The eye-catching figure of $3.4 billion primarily comprises assets associated with Solana (SOL), totaling around $1.2 billion. However, most of these SOL assets are locked in staking mechanisms, rendering them untradeable.
FTX has been granted the green light to offload up to $200 million worth of assets weekly for their clients, potentially alleviating their liabilities. While this might exert some additional selling pressure on the markets, it appears this move has largely been factored into market expectations. The real question is whether we will witness a massive sell-off of Solana.
Interestingly, there was a substantial sell-off of Solana assets in the preceding week, possibly in anticipation of this development. This situation might be a classic example of “sell the rumor, buy the news,” where traders and investors react to the news by buying rather than selling. Moreover, most Solana assets are locked, with only 7 million SOL currently available for trading, and most of those have already changed hands.
Alongside FTX News, CPI Data Surprises With Inflation Uptick
In parallel to this crypto news, the Consumer Price Index (CPI) data has surprised the financial world. The headline CPI exceeded expectations, registering 3.7% compared to the anticipated 3.6%, indicating an uptick in inflation.
However, the core CPI, which excludes volatile food and energy prices, came in at 4.3%, matching expectations. This subtle drop in the core CPI could have implications for the possibility of another interest rate hike by the Federal Reserve.
Despite all these, the broader financial markets have remained surprisingly calm. The unexpected CPI figures haven’t caused any dramatic market movements. Instead, the spotlight has turned to yields, which have dropped by one percent. This downward trend in yields can be attributed to two key factors.
Firstly, the disappointing economic data raises concerns about the possibility of a recession, prompting investors to seek refuge in assets like gold. Secondly, tomorrow’s Producer Price Index (PPI) release is eagerly awaited, hoping it will come in lower than expected, pushing yields further down.
Related Reading | Solana’s Weekly Plunge Of 10%: Fears of FTX Liquidation Cast Shadows