Crypto market strategist Willy Woo has outlined a sequence of events following the downfall of FTX that, in his view, led to persistent losses for altcoin enthusiasts while Bitcoin maintained rapid growth. Woo shared his analysis in an extended post, focusing on how actions taken during FTX’s bankruptcy procedure reshaped the market landscape from 2023 through 2025.
Behind The Scenes: Locked Tokens Offloaded
FTX, formerly among the largest digital asset exchanges, filed for bankruptcy in late 2022. Administrators managing the estate prioritized liquidating the platform’s holdings, including large sums of locked Solana tokens and assets from other projects. This massive selloff, structured through off-chain agreements, allowed hedge funds to acquire these tokens at steep discounts—with Woo stating the markdown topped 60% in several cases.
While these assets remained technically “locked,” hedge funds quickly moved to hedge their positions. They shorted token futures, combining the price discount with staking and basis yields, for near risk-free returns that Woo estimated in the 70–80% range. He emphasized that most everyday investors were unaware of these arrangements, entering the market after prices had already been pressured by indirect selling.
Bitcoin’s Strength And Stagnant Altcoins
During this period, Bitcoin’s trajectory diverged sharply from that of the wider crypto segment. Data placed Bitcoin dominance between 55% and 60%, a significant rise that ran parallel to its move past the $88,000 level by late 2025. Altcoins, however, generally saw little movement, as much of their perceived demand was absorbed in advance by institutional hedging activity.
Woo characterized this dynamic as a siphoning effect. He noted:
“All the alpha that retail investors anticipated went to market-neutral hedge funds, which captured the risk-free yield. The beta play that individual participants counted on simply evaporated.”
Market data from CoinGecko pegged Bitcoin at $71,285, up 2.47% over the past day, with the Altcoin Season Index still trailing well below the level marking a classic altcoin rally and the group’s total market cap lacking momentum.
Expert Insights On Investor Strategy
Woo warned that although upcoming unlocking events for project tokens might seem threatening, much of the token supply tied up on paper has already changed hands via off-chain deals. This could mean limited new selling pressure in any subsequent bull cycle. However, Woo remained cautious about altcoins, stating in his analysis that focusing on Bitcoin remains the simplest course.
Simon Dixon, an investor and FTX creditor, also reflected on the legal outcome. Dixon described FTX’s Chapter 11 process as a financial system mechanism that funneled value away from ordinary participants. He reported that some creditors experienced devastating losses, from retirement savings to their homes, and encouraged digital asset holders to self-custody their Bitcoin rather than trust third parties.
Dixon summarized the aftermath, writing:
“Chapter 11 is another wealth transfer to a small club within the financial-industrial complex, one that profits while lawyers drain the creditors.”
Through these events, both Woo and Dixon suggested that the most significant gains in the most recent cycle accumulated to those with access to privileged market structures, while general market participants found more consistent results by favoring Bitcoin over altcoins.
