FTX Token Liquidations: Hidden Sales Boost Bitcoin, Weigh on Altcoins

After the FTX Chapter 11 collapse, strategist Willy Woo argues that “locked” tokens were effectively offloaded via bankruptcy-linked arrangements, creating persistent sell pressure on altcoins from 2023–2025. FTX administrators prioritized liquidation, including large holdings of locked SOL. Woo says hedge funds bought the discounted tokens (often 60%+ off) and quickly hedged by shorting SOL futures, then pairing shorts with staking/basis yields. He estimates a near market-neutral return of roughly 70%–80%. Retail buyers, unaware of the structure, typically entered after the indirect selling had already hit prices. A key divergence emerges: Bitcoin strength. The article cites rising BTC dominance to about 55%–60% and BTC pushing past $88,000 in late 2025, while altcoins “flatlined.” The CoinGecko snapshot puts BTC around $71,285 (+2.47% over 24h). The Altcoin Season Index remains weak (~48), and altcoin market cap recovery lacks momentum. Investor Simon Dixon (an FTX creditor) frames Chapter 11 as a value transfer that left ordinary creditors with heavy losses, reinforcing the case for self-custody. Trading takeaway: FTX-driven mechanics appear structurally favorable to Bitcoin and can create ongoing friction for altcoin rallies.