The FTX estate's discounted token sales are drawing significant interest from investors. Many are acquiring millions of tokens across various projects, believing these assets are undervalued and poised for long-term growth.
Recently, I uncovered details regarding the estate's token sales involving Worldcoin (WLD) and Metaplex (MPLX). Meanwhile, my colleague Tim Copeland reported on Solana (SOL) token sales earlier this year. SOL was FTX's largest holding, with 41 million locked tokens currently valued at approximately $6 billion.
The estate sold these tokens in batches during April and May at substantial discounts, with prices ranging from $64 to $110 per token. With SOL now trading around $142, investors who acquired tokens from the estate, including Pantera Capital, Galaxy Trading, and Figure Markets, are already realizing paper profits. Over the past year, SOL has surged by 527%, rebounding from lows around $10 following FTX's collapse in November 2022.
"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," stated Cosmo Jiang, portfolio manager at Pantera Capital.
Jack Platts, founder of Hypersphere Ventures, echoed this sentiment, saying, "We’re fundamental-based investors, looking for projects led by visionary founders with high distribution potential to attract millions of users. Whenever opportunities arise, like distressed sellers, we explore them to see if they align with our fundamental view on crypto adoption." Hypersphere has invested in several tokens sold by the FTX estate but has not disclosed the names or purchase prices.
Earlier this week, I reported that the FTX estate planned to auction 22.3 million locked WLD tokens, valued at around $38 million, at a discounted rate. These tokens will unlock daily through 2028. However, some sources expressed concerns about the lengthy lockup periods for WLD tokens.
Despite these concerns, the WLD sale was competitive, with reports indicating WLD tokens sold for "in the low $1s." Currently, WLD is trading around $1.78, having peaked at about $11.75 in March. Worldcoin, co-founded by OpenAI's Sam Altman, aims to address global identity challenges in AI.
Last month, I reported that the FTX estate sold its MPLX tokens to Wave Digital Assets, from which several crypto funds, including Pantera Capital and ParaFi Capital, acquired tokens at a discount. Originally, the estate held 72.6 million MPLX tokens; 62.6 million were sold privately in recent months, representing the entire unlocked MPLX block held by the estate at that time.
The FTX estate still retains well-known tokens, including Wormhole and Pyth, which are significant in size. According to Arkham data, FTX's native FTT token remains the estate's largest holding, valued at about $675 million, though it is highly illiquid and may not be sold since the estate marked it to zero. They don’t expect to auction FTT and if they do, the value is likely to be minimal.
Nonetheless, FTT has surged nearly 100% over the past month, with a maximum 24-hour trading volume of around $360 million, considerably lower than the paper value of the estate’s FTT tokens. "It must be trading like a meme," Platts remarked.
Overall, the allure of discounted tokens and the potential for significant gains make these investments a risk worth considering.
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Disclaimer: The Block is an independent media outlet delivering news and data. As of November 2023, Foresight Ventures is a majority investor in The Block. The Block operates independently to provide objective information about the crypto industry.
