In a video released on Wednesday, cryptocurrency analyst and trader Miles Deutscher extensively discussed the long-awaited FTX bankruptcy payout issue, believing that the approximately $5 billion in stablecoins to be released tomorrow could be a key liquidity shock for the digital asset market.
$5 billion in liquidity will flood into cryptocurrency tomorrow
Deutscher reminded the audience that the cash portion of FTX assets—what he called "about $5 billion in stablecoins"—will enter creditors' accounts on May 30, marking the first wave of repayments since the exchange collapsed in 2022. "May 30 could be one of the most important days of this cycle," he said. "FTX will distribute over $5 billion in stablecoins to creditors this week. This accounts for about 2% of the total supply of stablecoins."
Due to the fact that most victims "continue to hold cryptocurrencies despite the FTX collapse," Deutscher believes that most of the compensation will not be deposited into traditional bank accounts, but will instead be redeployed in physical form throughout the ecosystem. "When this $5 billion arrives, it won't sit idle... they will reinject this liquidity back into the market," he predicted, adding that the influx of this capital "could become a catalyst for driving Bitcoin prices up to $120,000 and trigger the long-awaited altcoin season."
This YouTuber believes the timing is exceptionally favorable. Bitcoin's trading price is close to its all-time high, Ethereum has outperformed Bitcoin for the first time this year, and U.S. lawmakers seem closer than ever to passing a stablecoin regulatory framework. He believes that under these circumstances, even a conservative estimate—where only a few hundred million from FTX's funds directly flow into small-cap tokens—would still represent "net new liquidity that has never been seen in the space due to the complete depletion of retail funds."
Has it been priced in yet?
Deutscher dismissed the notion that the event has already been priced in: "This isn't like 'buying the rumor, selling the news' [...], otherwise people would have been talking about this all week. It wasn't until today that people realized this was actually going to happen in a few days." He referred to the imminent transfer as "latent liquidity" and emphasized that discussions on social media and trading desks remain subdued compared to when last year's repayment plan first surfaced.
Of course, how these funds will be allocated once they arrive is still unknown. The analyst acknowledges that the allocation will vary—some recipients will choose Bitcoin or Ethereum, some may hold stablecoins, and others will chase speculative altcoins—but the overall effect is expansive. "What I know is that this is net new liquidity flowing into the market," he said. "You have to ask yourself, where will this liquidity flow?"
Market participants won't have to wait long for preliminary evidence. Redemption instructions within the BitGo portal are already live, and creditors must complete their "Know Your Customer" (KYC) verification by June 1. By tomorrow, at least some portion of the stablecoins should be visible on-chain, providing analysts with real-time data to confirm (or challenge) Deutscher's argument.
Whether this $5 billion surge is a short-term shock or the ignition point of a broader risk appetite cycle, it will mark the end of one of the darkest chapters in the cryptocurrency space with the injection of new capital. As Deutscher summarized, "Combined with other catalysts I mentioned earlier, this could be quite a nice opportunity." The market is now watching to see if these recovered funds can truly become the driving force behind a rise for all ships.
As of the time of writing, BTC is trading at $107,873.
