FTX Creditor Repayments Begin, Crypto ETF Decisions Loom

On May 30, the crypto market is poised for significant developments with two major events on the horizon: the commencement of FTX creditor repayments and the anticipated decisions from US regulators on crypto ETFs.

FTX, which collapsed in November 2022, is set to begin repaying creditors with payments over $50,000 starting May 30. The exchange, now under the leadership of CEO John Ray III, will utilize its $11.4 billion cash reserve to initiate these disbursements. This injection of billions into the hands of crypto-native investors could potentially fuel buying momentum, especially if these funds are reinvested into digital assets during a period of cautiously bullish sentiment.

However, the optimism surrounding FTX repayments is tempered by the SEC's continued delays in approving crypto ETFs. With over 70 ETF filings across various assets, including XRP, Solana, Litecoin, and Ethereum, nearly all applications remain in review. The first key deadline for these decisions falls on May 30, the same day FTX payments begin. Analysts widely expect the SEC to delay approvals, potentially pushing major decisions to August as more regulatory clarity is sought.

The appointment of Paul Atkins as the 34th SEC Chairman has sparked some optimism. Known for his support of capital market efficiency, Atkins' leadership could signal a more crypto-friendly era at the SEC, contrasting with the restrictive stance of Gary Gensler's tenure. However, this shift may not be evident until later in the summer.

In parallel, China’s M2 money supply has surged to an all-time high, indicating a global liquidity surge. Historically, such expansions have correlated with rallies in risk-on assets like crypto. Analysts suggest that this increased liquidity, combined with the reentry of repayment capital into the market, could create a perfect storm for crypto assets.