Key Points
- FTX redeems $28 million in Solana amid liquidation.
- $1.1 billion in Solana holdings remain to be sold.
- Investor fears rise over the long-term impact on Solana’s price.
- FTX’s bankruptcy liquidation continues to pressure crypto markets.
FTX Solana liquidation has generated worries in the crypto community. As part of its imminent liquidation, not long ago the insolvent exchange offered for sale Solana (SOL) worth $28 million worth of SOL tokens still owns a whopping $1.1 billion worth of Solana which triggers fears for the health of the market in the future.
🚨🚨🚨FTX’s Solana addresses w/ over $1.5B worth of $SOL, SPL shitcoins, and wrapped Bitcoin have started moving tokens, likely getting ready to begin liquidation dumps.
Included is ~$200M worth of Solana Wrapped $BTC. pic.twitter.com/wPJpUK6CBS
— Rho Rider (@RhoRider) September 2, 2023
FTX Solana Liquidation: Immediate and Long-Term Impact
On October 15, 2024, FTX completed yet another round of Solana liquidation, the commercial activity where the company exchanged cash for a Solana crypto asset redeeming 178,631 SOL tokens valued at $28 million.
This is also an ongoing exercise to repay some of the creditors with impressive revenues owing from a large-looking debt of over $16 billion.
BC Court ruling that sanctioned these monthly remember sell-offs was meant to provide MRT to tissue ยู falling opinion of the markets as debts over the creditors are paid.
Despite this gentle approach, FTX Solana liquidation activities are rattling the investors’ confidence. Some effects of Solana’s price drop and wild fluctuations especially in 2022 the year of FTX’s collapse are still very much at the back of the trader’s mind.
It will be recalled that during those times, Solana’s price, which earned the trader confidence over multi-year ranges, dipped to single-digit levels. Since then, Solana has significantly recovered, however, the destruction of FTX and liquidation of assets will remain as a shadow over the coin.
FTX liquidated nearly 30 million SOL token holdings earlier on to funds like Pantera Capital and Galaxy Digital. These tokens, while sold at a discount, were subject to lock-up periods to avoid immediate flooding of the marketplace and thus avoid a sell-off frenzy.
How Low Will the FTX Solana Liquidation Go or How Deep Will the Sudden Collapse Extend?
There is apprehension amongst investors over the existing supply from Solana for issues up to removal from the market. Solana Token is worth $1.1 billion which is a whopping held by FTX and so the concern of the FTX Liquidation of Solana is huge for the long-term holders.
Although these assets are being sold off in a hurry, each round of liquidation brings in new worries.
However, in the Window 1 period, such managed liquidation may protect against significant movements down. But the situation is still volatile and with so many Solana that FTX holds, it may only be a matter of time before the price of the token gets affected.
To the most bullish investors of Solana, the question is how far the recovery can last when a great number of tokens are issued to the market.
Although it does comprise a selling to institutional investors of some with certain vesting periods, the FTX Solana liquidation strategy has its overturning potential yet to be ascertained.
Venture capital sales can only insulate the market for CVaR so much, and with the remaining SOL of $1.1 billion unclamped, the prices could be put in the dumping zone.
So far, the concern among investors is FTX’s liquidation schedule and how this grand Solana liquidation will play in the long run.
Furthermore, the crypto community is also on the lookout for the development roadmap of Solana to restore some confidence that seems to be in short supply in the current environment of liquidation-induced pressures.
