Willy Woo: FTX Liquidation Is Why Altcoins Have Underperformed This Cycle

On-chain analyst Willy Woo has pointed to the FTX bankruptcy estate’s massive, sustained crypto liquidations as the primary structural reason altcoins have broadly underperformed Bitcoin throughout the current market cycle, arguing that billions in forced selling created a headwind that suppressed alt/BTC ratios across the board.

Woo, a respected Bitcoin and on-chain data analyst who publishes research through his Woobull platform, made the case in recent commentary that the FTX estate’s court-ordered asset disposals have weighed disproportionately on altcoins. His argument centers on a straightforward mechanism: the bankrupt exchange held concentrated positions in dozens of tokens, and liquidating them into thin altcoin markets created persistent sell pressure that Bitcoin, with its far deeper liquidity, largely absorbed without the same drag.

~$200M/week

FTX estate liquidation cap approved by U.S. Bankruptcy Court, a steady stream of altcoin sell pressure Willy Woo credits with dragging alt/BTC ratios in the current bull cycle.

The observation resonates with a pattern visible in market data since FTX collapsed in November 2022. While Bitcoin has posted new all-time highs in the current cycle, many altcoins have failed to reclaim their previous cycle peaks in BTC-denominated terms. That is a divergence from historical bull market behavior, where altcoins typically outperform BTC in the later stages of a rally.

Willy Woo’s Case: FTX Selling Created a Structural Headwind for Altcoins

Woo’s thesis, outlined in analysis covered by PANews, is that the FTX estate’s forced selling operated as a sustained, cycle-long drag on altcoin valuations. Unlike a one-time market shock, the court-approved liquidation program created a steady supply of tokens hitting the market week after week, preventing the kind of supply squeeze that typically drives altcoin rallies in bull markets.

“Underperformance” in this context does not mean altcoins fell in absolute terms. Many posted gains. The issue is relative: altcoins gained less than Bitcoin, and most failed to reach previous cycle highs when priced in BTC. In prior cycles, the opposite was true, with smaller tokens dramatically outpacing BTC as risk appetite expanded.

Woo is not a fringe voice. He is one of the most widely followed on-chain analysts in crypto, known for developing metrics like the NVT ratio. His commentary on X reaches hundreds of thousands of followers, and his analysis has been featured across major crypto research platforms. When he identifies a structural cause for market behavior, the observation carries weight among traders and allocators.

FTX Estate Has Offloaded Billions in Altcoins Since 2023

The scale of the FTX estate’s crypto holdings was enormous. At the time of the exchange’s collapse, the estate held significant positions in Solana (SOL), FTT, Serum (SRM), Maps.me (MAPS), Oxygen (OXY), and dozens of other tokens. SOL was among the largest concentrated positions, with FTX and Alameda Research holding tens of millions of SOL tokens acquired at deeply discounted prices.

A U.S. Bankruptcy Court approved a liquidation plan that authorized the FTX estate to sell up to approximately $200 million per week in crypto assets. Galaxy Digital was appointed under a court-approved mandate to manage the sales, with guardrails designed to limit market impact. Despite those guardrails, the sheer volume of selling, sustained over months, created a structural overhang that market participants struggled to absorb.

The liquidation process has stretched from late 2022 through 2025, covering a period that aligns almost exactly with the current market cycle. This timeline is central to Woo’s thesis: the selling was not a one-time event but a prolonged, steady drain on altcoin liquidity that coincided with what should have been a recovery and expansion phase for the broader crypto market.

Bitcoin dominance, which tracks BTC’s share of total crypto market capitalization, illustrates the divergence clearly. At the start of 2023, Bitcoin dominance sat at roughly 40%. By early 2025, it had climbed above 55%, a move of more than 15 percentage points representing a massive capital rotation away from altcoins and toward Bitcoin.

40% → 55%+

Bitcoin dominance rose more than 15 percentage points from early 2023 to 2025, the BTC/alt divergence Willy Woo attributes largely to FTX liquidation pressure on the broader altcoin market.

This divergence is unusual by historical standards. In previous cycles, altcoins have typically gained dominance share during bull markets as risk appetite increases and capital rotates into smaller-cap assets. The current cycle has broken that pattern, and Woo’s FTX liquidation thesis provides a supply-side explanation for the anomaly.

Other factors have also contributed to Bitcoin’s relative strength, including the launch of spot Bitcoin ETFs and growing institutional BTC exposure. Companies like MetaPlanet, which recently announced plans for a Bitcoin card offering 1.6% BTC cashback to shareholders, reflect the expanding institutional preference for Bitcoin-specific allocation over broader crypto baskets.

What Altcoin Markets Could Look Like Once FTX Selling Ends

The key forward-looking question is whether the FTX estate’s liquidation is nearing completion. The estate has made substantial distributions to creditors, and the remaining pool of crypto assets available for sale has shrunk considerably since the process began. However, the exact timeline for the final disposition of all assets remains subject to court proceedings and has not been publicly confirmed as complete.

If Woo’s thesis is correct, the end of FTX-related selling would remove a concrete, identifiable source of structural sell pressure from altcoin markets. That does not guarantee an altcoin rally, as multiple other factors, including macroeconomic conditions, regulatory developments in cross-border settlement, and individual project fundamentals, also drive relative performance.

A historical parallel exists in the Mt. Gox Bitcoin distributions, where the long-anticipated release of BTC to creditors created anxiety about sell pressure but ultimately had a more muted market impact than feared. Whether FTX’s altcoin liquidations follow a similar pattern, where the overhang mattered more than the actual selling, is a question the market will answer as the process winds down.

The FTX collapse has also reshaped how market participants think about concentration risk. The structural changes in crypto custody and regulation that followed, including shifts in how family offices and traditional finance firms approach crypto allocation, may have lasting effects on altcoin capital flows that outlast the liquidation itself.

For now, Woo’s analysis gives altcoin holders a specific variable to monitor: the progress and eventual completion of FTX estate asset sales. Unlike vague narratives about “alt season,” the liquidation timeline is a concrete, observable event with a definable endpoint.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.