Solana (SOL) Faces a Price Decline Amid Anticipated FTX Liquidation
The value of Solana (SOL) fell over 6% in the recent 24 hours, due to concerns that the insolvent cryptocurrency platform, FTX, could soon sell significant portions of the token and other crypto assets linked to Solana. Data from Solscan, comprising values of the publicly visible FTX cold storage wallets, demonstrates that FTX holds $1.5 billion worth of crypto assets through the Solana network. Yet, only $128 million of this hefty sum is in Solana tokens.
Slew of Altcoins Affected
The remainder consists of several Solana-based altcoins, including Wrapped Bitcoin (wBTC), Maps token (MAPS), Serum (SRM) and many other tokens informally known as “Sam coins,” named in light-hearted manner after FTX's former CEO Sam Bankman-Fried. Despite this, the prospect of $128 million in SOL and hundreds of millions in other tokens connected to SOL hitting the market is leading to a lack of confidence.
Twitter Users Express Concerns
Users took to X (previously known as Twitter) to share their worries regarding the imminent sell-off. Some have maintained a calm stance, while others predict a harsh fall once FTX unloads its holdings. Nevertheless, the proposed bankruptcy plan for FTX limits the volume of sales at any given time.
Conditions for FTX Liquidation
Bankruptcy filings show that FTX's plan lays out conditions for token sales. FTX proposed that Galaxy Digital Capital Management, led by Mike Novogratz, would supervise the sales of its salvaged crypto holdings. What the plan entails is that FTX can only sell a maximum of $100 million worth of its tokens each week. This ceiling might increase to $200 million for a specific token.
The plan, however, still needs to get approved by the courts. FTX's case and related matters are due before the Delaware Bankruptcy Court on Sept. 13. Finally, during a hearing on April 12, FTX revealed it has around $7.3 billion in liquid assets amounting to a total of $4.3 billion in crypto assets available for stakeholder recovery at market prices.