In a major development for the altcoin world, embattled crypto exchange FTX is getting closer to selling key crypto assets, including a massive Solana (SOL) stash. A court hearing is scheduled for September 13 for the sale of these assets, with potential implications for both creditors and the Solana market. Here are the details…
FTX woes drive down the price of altcoin SOL
FTX’s financial troubles have raised concerns among crypto enthusiasts and investors. The exchange, which has been struggling with financial troubles, filed a petition on August 23 outlining its plan to convert crypto assets into fiat currency to repay creditors. This move could result in the recovery of $3.4 billion, an amount that has caught the attention of crypto stakeholders. This has led to speculation on social media platforms like Twitter about the potential impact of this massive sale on the cryptocurrency market, specifically Solana tokens. FTX’s relationship with Solana dates back to August 2020, when it purchased SOL from the Solana Foundation. Over time, it has accumulated a significant amount of Solana tokens, estimated at 47.5 million tokens worth approximately $685 million. Additionally, FTX holds a significant number of FTT tokens.
The FTX collapse and consequently biggest black swan Solana ever endured put SOL at $8
And we're worried about ~$600M that will be sold over the course of the next 5 years?
Some Major L1s have higher inflation than this and no one cares.
— Gumshoe (@0xGumshoe) September 10, 2023
However, there is a problem. Many of these assets are subject to vesting agreements that lock them in until 2028. This means FTX can only sell $100 million to $200 million worth of crypto assets each week. While some experts believe this may not have as dramatic an impact as feared, others express concerns about potential token oversupply. “The DeFi Investor” believes that Solana’s price may still be affected in the short term, but not to the extent that many expect.
There is excess supply
On the other hand, Zanshin Capital founder Alan Schill takes a more bearish view, emphasizing that there is a significant overall oversupply and the presence of other SOL investors with token vesting. The market has already responded to the uncertainty surrounding FTX’s asset sale. Over the weekend, nervous traders started draining SOL, resulting in a 5.8% drop in the token’s value in a single day. While SOL reached its intraday low of $17.87, FTT also fell close to 9% on the day.
At the time of this writing, SOL is trading at $18.18, falling 11 percent over the past two weeks to its lowest level since late June. These latest developments make SOL one of the worst performing crypto assets in the top 30. The fate of FTX’s asset sale and its potential impact on the Solana market hangs in the balance as it awaits court approval. The cryptocurrency community will be closely watching the hearing on September 13, which could reshape the crypto world. As a result, FTX’s upcoming crypto sale, particularly its significant Solana holdings, has sparked significant speculation and concern within the crypto community.
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