- FTX schedules the Solana token auction for April 2024.
- Investment giants like Galaxy Digital and Pantera show interest.
- FTX progresses with asset liquidation.
Solana is once again in the spotlight due to significant developments involving the FTX bankruptcy estate. The once prominent crypto exchange, FTX, collapsed in 2022, leading to legal and financial upheaval for the whole crypto community.
Due to its close involvement with FTX, Solana took a substantial beating after the FTX collapse. Now, the FTX bankruptcy estate is set to auction off the remainder of its SOL in possession, to give returns to its creditors.
FTX To Sell Off More Solana Tokens
FTX is selling off a substantial portion of its remaining SOL holdings in an effort to liquidate its assets and reimburse creditors. A “blind auction” is set to take place, where the identities of the bidders and the amounts of their bids remain confidential until the conclusion of the auction.
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According to a Bloomberg report, the bidding process had a set deadline on Wednesday, with the results expected to be announced by Thursday, April 25. The blind auction format was chosen to potentially drive up the final sale prices, with major cryptocurrency players like Figure Markets, Pantera Capital, and Abra anticipated to be among the key bidders.
In a recent monthly operating report, FTX disclosed it sold about $307.6M worth of SOL and ZBC tokens in March. At the time, the exchange offered SOL at a steep discount of $64. At the time, SOL was trading on public markets at $187. This is partially due to the long lockup period, aimed at minimizing market disruption.
In the latest liquidation, SOL will likely get a higher price, according to institutions interested in buying. The price will offer insights into the current market sentiment towards Solana, and its long-term prospects.
Solana Shows Resilience Despite FTX Collapse
Despite the upheaval caused by the FTX collapse, Solana has shown resilience in the cryptocurrency market this year. FTX was one of the largest holders of Solana, and its collapse pushed SOL down to its multi-year lows.
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Solana has since recovered, aided by robust ecosystem growth and technical updates. Despite ongoing sales from FTX, SOL was up 590.63% over 12 months, trading at $144 currently, indicating positive investor sentiment. However, it is important to note that many SOL tokens are still in lockup, meaning they are still waiting to be unleashed on the market.
This includes the batch of SOL offloaded at $64 per token, which included an agreement that a maximum of $100 million tokens would be sold weekly. The liquidation of FTX’s SOL holdings aims to avoid flooding the market, thereby safeguarding Solana’s price to some extent.
One key point is that the lockup price is the market’s prediction of SOL’s long-term price, discounted for inflation and volatility. If the FTX estate manages to sell the next batch of tokens at a higher price, this means that the SOL’s long-term outlook has improved.
On the Flipside
- Recently, Solana has been battling significant network congestion, leading to transaction failure at a rate of 70%. Despite these issues, SOL’s performance has been strong.
- In recent months, SOL has been closely following the ups and downs of Bitcoin, which likely signals a stabilization of its position in the crypto market.
Why This Matters
The results of the FTX Solana token auctions have far-reaching implications for Solana within the cryptocurrency market. Strong auction results act as a barometer for the health and resilience of the Solana ecosystem.
Read more about the FTX bankruptcy process:
FTX Bankruptcy Estate Aims to Make Claimants Whole by 2024 End
Read more about grand funding for innovative crypto projects:
Coreum Funds Eight New Projects in Latest Crypto Grant Wave
