The Aftermath of FTX Bankruptcy on Solana Cryptocurrency
It’s hard to believe it’s been a whole year since the shocking collapse of crypto exchange FTX. A lot has changed in the crypto world since then, but most cryptocurrencies have been relatively less volatile since the whole debacle ended, save for the recent bull run in October.
Solana, one of the cryptocurrencies closely tied to FTX’s Sam Bankman Fried, took a major beating in the aftermath. But Solana has now regained its footing in the past month, as it finally starts to move beyond the FTX bankruptcy shadow.
How Has Solana Fared Since FTX Bankruptcy?
FTX filed for bankruptcy in November 2022 following a protracted period of back and forths that rocked the cryptocurrency markets. Sam Bankman-Fried was a big supporter of Solana, backing projects in its ecosystem.
FTX also had a big stash of Solana in its balance books before its bankruptcy. According to CoinGecko, FTX is one of Solana’s largest holders, with approximately 55.8 million SOL, almost 10% of the total supply.
As one of the largest holders of Solana’s native token, FTX’s collapse sent SOL reeling. Many investors had worried FTX’s issues could spill over to Solana’s ecosystem.
“The crypto was already down more than 87% in November 2022 from its all-time high of $260. SOL was trading around $32 at the time rumors came out of FTX’s insolvency but plunged to $11 within days of the exchange’s bankruptcy announcement.”
Solana’s market cap is valued at $25 billion today. Chart: TradingView.com
Since then, SOL has been on a mild movement. The crypto found a bottom around $9.98 at the beginning of the year and has climbed steadily since. It spent most of the year trading between $23 and $27 from January to October.
Money Flows In
However, things changed in the middle of October, as the whole industry witnessed an inflow of money. This rally was largely in part due to Bitcoin’s surge in anticipation of the approval of spot Bitcoin ETFs in the US.
“Solana is now trading at $59.98 and is up by 501% from its January bottom of $9.98. FTX’s Solana holdings had grown by $2.79 billion since the beginning of the year, with $2.158 billion coming in the last 30 days alone.”
Solana’s massive rally has increased the possibility of FTX customers recovering more of their lost money. A US judge has given the bankrupt exchange permission to liquidate its cryptocurrency holdings worth over $3.4 billion, including $1.1 billion in SOL. However, a large portion of FTX’s SOL holdings (42.2 million tokens) are still locked up and not immediately tradable on the market.
Crypto analyst Jacob Canfield believes that Solana could easily trade over $1,000 per coin and take the second spot behind Bitcoin.
Featured image from Shutterstock
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