Analysts: FTX liquidation has spurred arbitrage opportunities for locked tokens, potentially a major reason for the recent poor performance of the crypto market.

Crypto analyst Willy Woo, writing on the X platform, stated that the current market sentiment is weak and altcoins are performing poorly overall. The core reason can be traced back to the asset liquidation mechanism of "locked token discount trading + futures hedging" that emerged after FTX's bankruptcy. During the FTX liquidation process, a large amount of locked SOL was sold under a "pay first, deliver later" protocol. Due to limited liquidity, these tokens were typically traded at a discount of over 60%. Some hedge funds bought these tokens and then hedged price risk by shorting them in the futures market. Combined with staking returns and basis gains, this resulted in a near-risk-free return of approximately 70%–80%. Willy Woo believes that this strategy subsequently spread throughout the industry, with many project teams and their foundations selling their locked tokens to hedge funds in advance. The hedge funds then hedged and released selling pressure through the derivatives market, making it difficult for ordinary investors to obtain excess returns. This is a significant reason for the overall poor performance of this cycle. This means that the nominal future unlocking selling pressure of some projects has already been absorbed in advance, and the actual selling pressure in the next bull market may be lower than expected. Ordinary investors in the crypto market will find it difficult to gain an advantage, and he recommends prioritizing core assets such as Bitcoin.