While SOL, the native token of the Solana network, recovered from a gargantuan crash stemming from its entanglement with the now-defunct crypto exchange FTX and its sister company Alameda Research, there are fresh concerns about potential market disruptions in the near term.
A former employee of FTX has reportedly revealed that the fallen exchange still holds a significant amount of Solana tokens. Does this mean the price of SOL will fall sharply when FTX offloads these supposed tokens?
Is A Solana Crash Imminent?
In a shocking revelation, crypto influencer Wise Advice disclosed that an ex-FTX employee has come forward as a whistleblower, revealing that the Sam Bankman-Fried-owned exchange has a secret SOL hoard — which is equivalent to 8% of the coin’s total supply.
According to the whistleblower, FTX and Alameda are holding the Solana tokens in previously undisclosed crypto wallets. This hidden SOL stash represents a potentially massive impact on the market, which many speculate could exert selling pressure on the asset’s price.
Furthermore, the revelation underscores the murky financial practices within FTX that played a part in the exchange’s eventual collapse.
Wise Advice hopes FTX will sell these tokens via over-the-counter (OTC) deals instead of dumping them on the open market. However, he thinks some selling pressure could hit the market soon if the SOL tokens are dumped en masse.
What Do Solana Fundamentals Reveal?
There are high expectations that the U.S. Securities and Exchange Commission (SEC) will soon approve SOL exchange-traded products after giving the nod to Ether instruments on July 22. The SEC has set the final deadline for the SOL ETF ruling in March 2025.
Solana’s key appeal among investors is its fast settlement speeds and low fees. Those have been the foundation for meme coin trading frenzies numerous times over the past year. The SEC’s backing down on its claim that Solana is a security has further added to SOL’s appeal among professional investors.
However, BlackRock’s head of digital assets stated at the Bitcoin 2024 conference in Nashville that “there is very little interest today” beyond Bitcoin and Ether among their clients. This opinion is not unanimous, as investment manager Franklin Templeton presents a very optimistic outlook for a spot SOL ETF based on surging adoption and successful overcoming of “technological growing pains.”
Furthermore, the Cboe exchange already submitted a pair of 19b-4 filings with the SEC asking to list VanEck’s and 21Shares’ potential spot SOL investment vehicles, which were initially filed in late June.
Should FTX sell more tokens right now, the price of SOL could crash, but the Solana ecosystem remains stronger than ever.
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