The fourth round of FTX bankruptcy proceeds distribution will take place at a different time. The foundation will begin transferring approximately $2.2 billion to eligible creditors on March 31st, just as Bitcoin (BTC) has pushed back above $70,000 into what Glassnode calls the thin on-chain zone of $72,000 to $82,000.
FTX announced on March 18 that the fourth distribution will begin on March 31 and end on April 3, with eligible creditors expected to receive their funds via BitGo, Kraken, or Payoneer within one to three business days.
Dotcom customer claims will increase by 18% until reaching a cumulative recovery rate of 96%, US customer claims will receive 5% until reaching 100%, and general unsecured and digital asset loan claims will each receive 15% until reaching 100%. Convenience claims remain at 120% cumulatively.
This is the largest FTX distribution since the second round of over $5 billion in May 2025 and 37.5% larger than the third round of $1.6 billion in September 2025.
Even if it’s less than half the size of May’s round, this is a substantial liquidity event based on nominal size alone.
Bitcoin’s current structure
Bitcoin is currently trading around $70,000, with an intraday low of $69,500 after yesterday’s high of $74,603.
According to a March 18 report from Glassnode, BTC broke above $70,000 and entered a thinly accumulated $72,000 to $82,000 zone with limited on-chain resistance.
The market has entered that zone, but it’s at or just below the lower limit and is still trying to hold the breakout clean.
Only about 60% of the supply is profitable. Glassnode states that a sustained move above 75% will be required to confirm a true early bullish transition.
The report still treated this as an early conviction rather than a fully verified bull regime.
As a result, the current setup is defined by absorption. Short-term holders saw their profits jump to $18.4 million per hour as Bitcoin approached $74,000, reflecting the same sell-to-high behavior seen in February.
If the market can digest that selloff and sustain above $70,000, higher levels such as a true market average near $78,000 or an air gap upper band near $82,000 become more realistic.
However, if the absorption fails, the move will still look more like a fragile bear market recovery than a sustained trend change.
The current recovery appears to be spot-driven rather than leverage-driven.
According to Glassnode, ETF allocations have recovered, spot cumulative volume delta has turned positive, Coinbase spot activity has stabilized and turned positive, and CME futures positioning remains subdued.
CoinShares added that last week there were $1.06 billion in inflows into digital asset investment products, of which Bitcoin accounted for $793 million, expanding three-week Bitcoin inflows to $2.2 billion.
Derivatives are showing a constructive but subdued picture as Glassnode sees the market moving away from negative financing and defensive hedging.
According to Deribit, BTC funding has returned to near neutrality, BTC futures implied yields are flat at around 2% to 3% across tenors, and 7-day BTC implied volatility remains near 52%.
This profile fits a recovering market lacking active speculative beliefs.
Why FTX cache can make an impact now
Bitcoin investment products have absorbed $2.2 billion in the past three weeks, according to CoinShares.
FTX is distributing $2.2 billion in cash. The two flows are different in nature. One represents the direct inflow of Bitcoin funds, and the other represents the bankruptcy cash distributed to many creditors. However, the nominal size is the same.
This dividend is a test of recycled liquidity, but it’s unclear whether even a small recycling rate will be enough to matter in a market that is trying to stay above $70,000 while absorbing $18.4 million per hour in profit taking from short-term holders.
Additionally, Glassnode warned that FTX Cash will land after the tailwind March options expiry. About $4.5 billion of negative dealer gamma remains at about $75,000, with $3.9 billion expiring this month.
The report warns that dealer hedge unwinding could lead to headwinds and consolidation once quarter-end deadlines pass. FTX’s cash could take a hit at the same time as key market mechanisms weaken.
recycling model
At a 5% recycle rate, $110 million would represent about 13.9% of last week’s Bitcoin inflows, and at the current pace of short-term holders realized gains of $18.4 million per hour, it would be about 6 hours.
Although important, they may not be sufficient to guide direction on their own.
At a 10% recycling rate, $220 million represents approximately 27.7% of last week’s Bitcoin inflows and approximately 12 hours of profit realization for current short-term holders. It is large enough to influence price movements over short windows, especially if ETF flows remain positive.
Assuming a 20% recycling rate, $440 million represents about 55.5% of last week’s Bitcoin capital inflows and almost 24 hours of profit realization for current short-term holders. At that point, the payment becomes a meaningful marginal bid.
Assuming a 30% recycling rate, $660 million represents approximately 83.2% of last week’s Bitcoin inflows. This is a level where a wave of re-risking by FTX is visible compared to recent institutional spot demand.
Spreading the full $2.2 billion evenly over three days would be $733 million per business day.
Mechanically spread over 72 hours, the realized rate of return for current short-term holders is approximately $30.6 million per hour, compared to $18.4 million per hour. In a illiquid situation where absorptive capacity dictates direction, even modest recycling rates are worth paying attention to.
| recycling rate | Cash may be returned | Share of BTC inflows last week | STH profit take equivalent to $18.4 million/hour | remove |
|---|---|---|---|---|
| 5% | $110 million | 13.9% | ~6 hours | Worth noting, but it may not be enough |
| 10% | $220 million | 27.7% | ~12 hours | May affect short-term price fluctuations |
| 20% | $440 million | 55.5% | ~24 hours | A meaningful marginal bid |
| 30% | $660 million | 83.2% | ~36 hours | Large enough to be clearly visible on the tape |
The bullish case assumes a recycling rate of 10% to 20%, along with positive demand for the ETF and continued spot-driven bidding. BTC regains and holds the air gap floor, digesting short-term holder selling and begins trading towards the true market average of $78,000 and then $82,000.
The key will be price strength without significant releveraging in futures, validating a healthier spot-led recovery story.
In a bearish case, most recipients are expected to avoid risk and hold on to their cash or redeploy it elsewhere. BTC loses its air gap floor and moves back toward its previous $64,000 to $72,000 accumulation cluster.
The market has effectively voted that the returned FTX cash will not be able to overcome the existing profit-taking and post-maturity headwinds.
The late March period will be a test of whether cyclical liquidity can take hold in spot-driven markets before leverage returns fully.
What will determine the outcome is how much of the returned FTX money becomes new demand for cryptocurrencies.
(Tag translation) Bitcoin
