The Allure of FTX Estate's Discounted Token Sales

The FTX estate's discounted token sales continue to attract interest from investors, who are snapping up millions of tokens across various projects, believing these assets are undervalued with potential long-term upside. Recently, details emerged about the estate's token sales, particularly involving Worldcoin (WLD) and Metaplex (MPLX), while earlier news covered Solana (SOL) token sales by my colleague Tim Copeland.

Solana’s Token Sales

SOL was FTX's largest holding, with 41 million locked tokens, currently valued around $6 billion. The estate sold these tokens in batches between April and May at a significant discount, ranging from $64 to $110 per token. With SOL now trading around $142, investors like Pantera Capital, Galaxy Trading, and Figure Markets are already seeing returns, as SOL surged by 527% over the past year, rebounding from its lows of around $10 after FTX's collapse in November 2022.

Cosmo Jiang, a portfolio manager at Pantera Capital, emphasized their strategy: "We're only interested in buying assets from bankruptcy estates that we think are super high quality, that we want to own for the long term, and that we think have meaningful upside from here."

Jack Platts, founder of Hypersphere Ventures, echoed similar sentiments, stating, "We're fundamental-based investors, and we're looking for projects led by visionary founders that have high distribution potential to bring on the next tens of millions of users."

The Competitive WLD Auction

As reported earlier, the FTX estate planned to auction 22.3 million locked WLD tokens, valued at around $38 million, at a discount. These tokens are set to unlock daily through 2028. Despite concerns regarding the lockup periods, the auction was competitive, with WLD selling "in the low $1s," and currently trading around $1.78, having peaked at $11.75 in March. Worldcoin, co-founded by OpenAI's Sam Altman, aims to solve global identity challenges in AI.

MPLX Token Sales and Future Holdings

Last month, the FTX estate sold its MPLX tokens to Wave Digital Assets, from which Pantera Capital and ParaFi Capital later acquired tokens at a discount. The FTX estate had 72.6 million MPLX tokens and sold 62.6 million privately, leaving only 7.5 million available for sale.

The estate still holds notable tokens, including Wormhole and Pyth. The largest remaining holding is FTX's native FTT token, valued at about $675 million, but it's considered highly illiquid and may not sell well. Despite recent surges, FTT is trading as a meme asset, with a 24-hour trading volume significantly lower than its paper value.

Conclusion

The attraction of discounted tokens and potential gains makes these investments an interesting prospect for many investors.

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