Bitcoin Market Outlook

Despite recent downturns linked to geopolitical tensions, analysts from K33 maintain a bullish outlook for Bitcoin in Q4 due to strong U.S. job data and effective creditor repayments from the FTX estate.

FTX Reorganization Plan

Almost two years post-collapse, Judge John Dorsey approved FTX’s reorganization plan in Delaware's Bankruptcy Court, advancing creditor repayments.

About 94% of creditors in the “dotcom customer entitlement claims” class voted in favor of the plan, representing $6.83 billion in claims. However, criticism arose from Sunil Kavuri of the largest creditor group, advocating for payouts in crypto rather than fiat currency.

K33 analysts Vetle Lunde and David Zimmerman project payouts could begin by late Q4 2024 or early Q1 2025, with individual claims under $50,000 totaling around $1.2 billion, while larger creditors may receive $9 billion by February 2025.

Market Impact

The analysts question how much of the repayments will re-enter the crypto market, noting that around $3.9 billion of the claims have been bought by credit funds and are unlikely to return. About 33% of remaining claims are associated with sanctioned countries and individuals lacking KYC verification, meaning they cannot claim.

This leaves an estimated $8 billion, with projections indicating that 20%-40% could flow back into the market—approximately $2.4 billion in the middle range. However, the impact may unfold gradually over the next year.

Current Cryptocurrency Performance

Currently, Bitcoin trades at $62,415, corrected from its March high of nearly $74,000 but still up 40% year-to-date. Its market dominance has increased from 52.5% to 58%. Conversely, Ethereum's dominance has dropped from 16.7% to 13.8%, reflecting traders' caution in the current environment.

Only 21 of the top 100 cryptocurrencies have outperformed Bitcoin in 2024, mostly memecoins or new projects, while 48 have seen negative returns. Bitcoin premiums on the CME are higher than Ether premiums.

Conclusion

The first nine months of 2024 showed that the gains were primarily concentrated in Bitcoin, while most altcoins have struggled. The analysts note that a widening futures contango suggests bullish expectations for year-end if the trend persists.