Massive liquidity is about to enter the cryptocurrency market for the first time: Will this benefit Bitcoin's price?

FTX is about to distribute $5 billion worth of stablecoins to its customers, and the cryptocurrency market is expected to witness one of the largest injections in history. The long-awaited repayment plan for FTX creditors seems to be making traders anxious. The $5 billion stablecoin repayment plan may be good news for those waiting to recover their funds, but the market may be more concerned about where this money will go.

FTX Distribution

 As the exchange reserves dwindle, the inflow and outflow of stablecoins have decreased, and leading tokens like Bitcoin, Ethereum, Ripple, and Cardano seem to be facing some potential selling pressure. Once recipients receive their shares, stablecoin reserves on CEX are expected to increase, which may flood the market and boost trading activity in the sector.

The question now is whether Bitcoin or Ethereum will benefit from this move?

After hitting a new high last week, Bitcoin's price opened this week showing a bearish trend. The token is about to break below a key support level, while Ethereum has shown strength, maintaining solidly above $2,600, continuing its rise and fall. Additionally, XRP and ADA continue to trade below a downward trend line, while memecoins have plummeted by double digits.

This payout is one of the largest in cryptocurrency history, as creditors will receive funds 18 months after the exchange's collapse. Therefore, it is expected to first impact the exchange, potentially increasing stablecoin reserves at exchanges. While some stablecoins may exit the sector, it is believed that some stablecoins will be exchanged for other cryptocurrencies, with Bitcoin being a popular choice among them. Thus, Bitcoin is expected to gain some liquidity, potentially pushing up its price.

In this way, other cryptocurrencies may also experience similar price increases, which could help the market maintain a bullish sentiment.