Bloomberg reported at the end of the week that the now-defunct crypto exchange FTX has sold approximately two-thirds of its Solana holdings at a significant markdown.
Following a court order to liquidate its substantial SOL holdings to settle its debts, concerns arose among SOL investors regarding a potential rapid drop in the cryptocurrency’s value if FTX executed a complete sell-off. Despite these worries, the bankrupt exchange proceeded to offload the majority of its holdings at prices below the market value.
Details of FTX’s Sell-Off
According to Bloomberg, the bankrupt crypto exchange FTX conducted a significant sell-off, offloading approximately 30 million tokens to key investors. This strategic move allowed FTX to amass a substantial $1.9 billion in funds. Among the notable purchasers were industry giants such as Galaxy Trading, which acquired $620 million worth of SOL, and Pantera Capital, which secured $250 million worth of SOL.
The sell-off was executed at an estimated price of $64 per SOL token. At the time of the sale, SOL was trading at approximately $172 per token. This suggests that the tokens were sold at a significant discount of 63% below the market price. In actuality, based on the prevailing market value, the sold tokens were valued at around $5.16 billion.
In order to prevent a potential price collapse, the remaining SOL tokens are subject to a four-year vesting plan, with a gradual monthly release schedule until January 2028. As of now, the bankrupt exchange still holds 21 million SOL tokens under lock, valued at approximately $3.75 billion based on current market rates.
The present condition of Solana
The downfall of FTX in 2022 had profound repercussions on the Solana ecosystem, resulting in a series of significant price declines. This outcome stemmed from the substantial investment made by Sam Bankman-Fried (SBF), the former CEO of FTX, in Solana. SBF, a staunch advocate of SOL, had allocated a considerable portion of the company’s resources to amass holdings of the cryptocurrency. However, following the collapse of the exchange, the value of Solana experienced a downward spiral.
In a recent development, SBF has been sentenced to serve a 25-year prison term for his pivotal role in the collapse of FTX. This decision marks a significant turn of events in the cryptocurrency landscape and underscores the repercussions of mismanagement and malpractice within the industry.
In contrast, Solana experienced a remarkable surge in price towards the end of last year, marking its emergence from the influence of FTX. Beyond its price appreciation, Solana’s ecosystem has flourished, witnessing notable success with meme coins and emerging as a formidable competitor to Ethereum in the realm of alternative cryptocurrencies.
Furthermore, Solana has demonstrated significant growth in both the Decentralized Exchange (DEX) and Decentralized Finance (DeFi) sectors. Notably, the blockchain witnessed a staggering 332% increase in DEX trading volume and a 97% rise in market capitalization during the last quarter.
Read more about: Analyzing FTX’s Restructuring Plan and its Impact on the Exchange’s Future
