Svmuu News Crypto analyst Willy Woo stated on platform X that the current low market sentiment and poor overall performance of altcoins can be traced back to the asset liquidation mechanism of "discounted trading of locked tokens + futures hedging" spurred by the FTX bankruptcy. During the FTX liquidation process, a large amount of locked SOL was sold under "pay now, deliver later" agreements, typically at discounts exceeding 60% due to liquidity constraints. Some hedge funds purchased these tokens and then hedged price risks by shorting on the futures market, combining staking yields and basis spread returns to achieve nearly risk-free profits of approximately 70%–80%.
Willy Woo believes this strategy subsequently spread throughout the industry, with many project teams and their foundations selling locked tokens in advance to hedge funds. The latter then hedge through the derivatives market and release selling pressure, making it difficult for ordinary investors to obtain excess returns. This has become a significant reason for the overall poor performance in this cycle. This implies that the nominal future unlocking and selling pressure for some projects has already been digested in advance. The actual selling pressure in the next bull market may be lower than expected. In the crypto market, it is difficult for ordinary investors to establish an advantage, and it is recommended to prioritize attention on core assets like Bitcoin.