According to The Block: Bitcoin's positive momentum for Q4 2024 remains intact, bolstered by the recent FTX creditor repayment developments, according to K33 analysts Vetle Lunde and David Zimmerman. With a U.S. bankruptcy judge approving FTX’s reorganization plan, around $2.4 billion could potentially flow back into the crypto market, but this is expected to happen in waves, softening the immediate impact.
Bitcoin Dominates 2024, Outperforming Most Cryptocurrencies
Despite Bitcoin’s correction from its all-time high of nearly $74,000 in March, the cryptocurrency remains 40% up year-to-date, currently trading at $62,415. Bitcoin's dominance in the crypto market has surged from 52.5% to 58% this year, while Ethereum’s dominance has dropped from 16.7% to 13.8%, signaling a shift in investor preference toward Bitcoin.
Out of the top 100 cryptocurrencies by market cap, only 21 have outperformed Bitcoin in 2024, with most being memecoins, illiquid coins, or new Layer 1 projects, according to K33. In contrast, 48 of the top 100 cryptocurrencies have generated negative returns for the year, and while coins like ETH, SOL, AAVE, DOGE, and TRX have posted positive returns, they still underperformed Bitcoin.
FTX Repayment Plan and Its Impact on Bitcoin
The approval of FTX’s reorganization plan in U.S. Bankruptcy Court marks a significant step in the repayment process, with about 94% of creditors in the "dotcom customer entitlement claims" class, representing $6.83 billion in claims, voting in favor of the plan. The repayments, estimated to begin by the end of Q4 and into early Q1 2025, could see around $2.4 billion injected back into the crypto market.
Analysts from K33 predict that 20% to 40% of the remaining claims, which represent $8 billion after various adjustments, could return to the market, largely due to FTX’s trader base consisting of crypto-native, aggressive risk-takers. However, this process will likely unfold in multiple waves over the next year, meaning the overall market impact could be gradual and softer than anticipated.
Market Outlook: Cautious Optimism
While traders remain cautious, especially with altcoins struggling to keep up, Bitcoin has shown resilience. Premiums on the CME for Bitcoin futures are sitting higher than those for Ethereum, reflecting hesitancy to chase higher-risk assets, or beta, in the current market environment. Additionally, the widening futures contango—the gap between futures and spot prices—signals bullish expectations heading into the end of the year.
Despite some short-term downturns due to geopolitical tensions and economic concerns, the recent developments in the FTX creditor repayment process and positive U.S. labor data support a bullish Q4 outlook for Bitcoin. As institutional interest and optimism for riskier assets return, Bitcoin could see further upside by the year’s end.
