The Struggle of Solana Since the FTX Collapse
Solana has been one of the cryptocurrencies facing significant challenges in the market since the implosion of FTX in 2022.
FTX Liquidation and Its Impact on SOL
The FTX liquidators have received approval to liquidate a staggering $3.4 billion worth of cryptocurrency assets. Among these assets, FTX holds approximately $1.2 billion in SOL, which is Solana’s native token.
The native Solana token (SOL) has encountered difficulties in regaining its value since it experienced a sharp decline from above $36 in November of the previous year.
Sentiment Shift for SOL
With most cryptocurrency assets experiencing downward volatility, the sentiment surrounding SOL has mostly been negative in recent days. Nevertheless, a leading cryptocurrency analyst believes that SOL could be on the verge of a “sell the rumor, buy the news” scenario.
SOL Price and FTX Liquidation
As of Friday morning, Solana is trading at approximately $19.10, reflecting a 1.5% increase in the past 24 hours. These modest gains occurred during a week when the collapsed cryptocurrency exchange, FTX, received court approval to liquidate $3.4 billion worth of cryptocurrency assets as part of its claims resolution plan.
FTX’s holdings include $1.2 billion worth of SOL. However, the majority of these tokens are staked or locked up in various contracts. Only a small fraction of these tokens will be released on a monthly basis, which suggests minimal impact on SOL’s price since the market has largely factored in this situation.
- FTX received approval to sell $3.4 billion in cryptocurrency assets.
- Markets have not experienced significant declines in response to this news.
Michael van de Poppe, a prominent cryptocurrency analyst, shared his perspective on Solana’s price following the court’s approval for FTX’s asset liquidation:
“The Solana, which corresponds to $1.2 billion of the assets of FTX, is mostly staked and can’t be sold. Now, what’s next?
First of all, FTX can sell up to $200 million of assets on a weekly basis for their corresponding clients so the liabilities could be erased. This can add some additional sell pressure on the markets, but that’s probably already priced in. The major fact is that we should be seeing a case of Solana being sold off massively, but as an anticipation, Solana was already sold off entirely in the past week and could result in a ‘sell the rumor, buy the news’ type of thing.”
The analyst emphasizes that most of the SOL held by FTX cannot be sold, and of the amount that could potentially hit the market, it has already been “mostly sold.”