Investors considering buying altcoin Solana need to be aware of the increased regulatory risk around this crypto. Solana has risen more than 50% since the start of the year. But their incredible triple-digit returns earlier in the year have all but disappeared. It has dropped about 25% in the last 30 days. Obviously it is in the bottom zone.
Buy bearish strategy for altcoin
The “buy low” strategy for altcoin Solana has worked in the past. However, there is no guarantee that it will work this time. The key factor here is the new regulatory turmoil in the crypto market. However, the current situation presents a unique buying opportunity if you are willing to take additional risks and have a long-term perspective. In May, the Securities and Exchange Commission (SEC) released a list of 46 cryptocurrencies it believes to be securities. Accordingly, altcoin Solana was not one of them. However, in early June, the SEC filed a lawsuit against major cryptocurrency exchanges Binance and Coinbase.
In these cases, the SEC named Solana one of the unregistered securities that these exchanges improperly offered to investors. In response to this news, an atmosphere of panic prevailed among investors. Solana fell 20%. In reality, a direct sanction by the SEC would be disastrous. Honestly, this will not end Solana. But it poses immediate implications for market liquidity. Cryptocurrency exchanges tend to delist the token. Accordingly, this will make trading much more difficult. We’ve already seen the harbinger of a difficult situation when Robinhood announced that as of June 27, it will remove altcoin Solana from the list of cryptos that users can buy and sell.
The risks continue
At the same time, the shadow of an SEC lawsuit will strain the hands of many institutional investors who no longer want to hold the token. In addition, this will potentially put serious downward pressure on its price. According to some market analysts, this is the reason for the 20% drop in price in just 24 hours. The good news is that supporters of crypto have signaled their willingness to challenge the SEC. The Altcoin Solana Foundation has already responded by highlighting that it is a token that powers a decentralized blockchain rather than a security.
Moreover, it seems that developers in the broader ecosystem are taking action. Accordingly, some are calling for Solana to fork two different blockchains. So I don’t think Solana will crash without a fight and definitely reset. At worst, we could experience a scenario similar to what is happening now with XRP exploring overseas opportunities even while locked in a long-standing lawsuit with the SEC.
Are there other growth catalysts?
If investors can overcome the increased regulatory risk Solana currently faces, there is plenty of reason for optimism. For one, its ecosystem went on a growth spurt in 2023. The FTX crash last year had a huge impact on the token. However, most of the key blockchain metrics, such as transaction volume, are starting to return to pre-FTX levels.
The next wave of growth will come from the new mobile crypto strategy. In April, altcoin Solana launched the first “crypto phone” for a major blockchain. Its founders were very optimistic about the ability of this new mobile crypto strategy to attract even more daily users. The token also seems to be moving towards Web3 very aggressively. Accordingly, this will support additional growth.
Getting Altcoin Solana
Buying Altcoin Solana now is not for the faint of heart. Of course, there is an enormous amount of regulatory risk involved. Also, no one knows how the new mobile and Web 3 strategies will turn out. When we look at Kriptokoin.com, Solana is still trading under its value. Its current price is around $15. Accordingly, it is 94% below its all-time high.
Altcoin Solana took a beating after the collapse of FTX. Now it’s being battered, albeit indirectly, by the SEC. As dissident investors know, the time to buy is when there is blood on the streets. And that’s exactly what it looks like right now.
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