FTX Recovery Trust has confirmed that the second distribution of funds to qualifying creditors under its Chapter 11 reorganization plan will begin on May 30, 2025.

In total, more than $5 billion will be released through distribution providers chosen by users: BitGo or Kraken. But this isn't just a piece of legal news or an administrative procedure in the long saga of the fallen exchange. In fact, it could become one of the most important catalysts for the price of Bitcoin this quarter. Why? Because a considerable portion of that money which will end up in the hands of users who were defrauded by the exchange and want a second chance could be reinvested in Bitcoin (BTC) or cryptocurrencies.

A mountain of liquidity on the way

The magnitude of the repayment is significant: over $5 billion, representing one of the largest redistributions of capital into private hands in the history of the digital asset ecosystem.

This process will not be done through traditional checks or bank deposits, but rather the funds will be sent directly to accounts on Kraken or BitGo, platforms that facilitate immediate access to Bitcoin and cryptocurrency markets.

The official statement clarifies that by choosing a Distribution Service Provider, creditors have opted out of receiving cash directly, opting instead to have the funds sent to their accounts at these exchanges or custodians, from where they can freely access them.

And this is where an interesting opportunity arises: those who receive these funds are already within the cryptocurrency ecosystem, and many of them could take advantage of the opportunity to reinvest in Bitcoin.

It's not unreasonable to think that a significant portion of that $5 billion could end up in BTC. In fact, in previous cycles, judicial distributions or massive returns (such as the Mt. Gox one, although not yet fully realized) have been seen as events with potential impact on market dynamics, whether through selling pressure... or, as in this case, through a wave of buybacks.

Unlike Mt. Gox, this time it could be bullish

One of the major concerns surrounding mass returns like this is the fear of selling pressure. However, this case has one feature that substantially differentiates it from other similar processes: the funds are not returned in bitcoin, but in dollars. And that changes the incentive.

Furthermore, this influx of funds comes at a particularly favorable time for Bitcoin. It's not just a judicial repayment: it's an injection of liquidity into the market at a time of bullish narrative, reinforced by macroeconomic and technical factors. Bitcoin has been hovering around its all-time high for several days, and there are several reasons to believe it could soon surpass it.

One of the most relevant factors is the trade agreement (truce) between the United States and China, which has begun to ease the tensions generated by the tariff war. This geopolitical shift not only improves the global macroeconomic outlook but also restores risk appetite to financial markets in general, and the cryptocurrency market in particular.

In parallel, the Bitcoin price is going through the acceleration phase typical of post-halving cycles. As documented in previous cycles (2013, 2017, 2021), Bitcoin tends to enter a parabolic phase between 6 and 18 months after the halving, with price increases exceeding 500% in some cases. The most recent halving occurred in April 2024, so we are right within that golden window. And now, as if more fuel were needed to fuel that rocket, more than $5 billion is pouring into the cryptocurrency accounts of users who might be eager to take advantage of this new bullish wave.

How much could this impact the price?

While not all of the money will be invested in Bitcoin (some users will withdraw their funds, others will leave them frozen or diversified), even a relatively small fraction, say, 10% of the funds, would represent an injection of $500 million in potential demand.

In a market where daily net liquidity is limited, and BTC circulation is increasingly held by long-term holders, this type of inflow can significantly move the price.

Furthermore, the fact that the distribution is staggered, with users beginning to receive funds between May 30 and early June, suggests that the effect will not be immediate, but could extend over several weeks, coinciding with the beginning of a historically strong period for Bitcoin in the post-halving years: the third quarter of the year.

Bitcoin has seen positive returns in the third quarters of the years following each halving. Source: CoinGlass.

It's also important to consider market psychology: the announcement of this return may already be interpreted as a positive signal by investors, encouraging early accumulation of BTC before new buyers arrive.