- Pantera Capital purchases 2,000 Solana tokens.
- Tokens sold above the prior auction price.
- Sale reflects on Solana’s recent rally.
The collapse of FTX, an exchange that was a major holder of SOL, brought Solana to its knees; at one point trading near $10. More than a year later, despite the ongoing FTX bankruptcy, Solana recovered and increased more than tenfold. As its prospects improved, major institutions once again started betting on SOL.
Most recently, Pantera Capital has increased its portfolio of SOL tokens, purchased from the FTX exchange. This investment, even at a discounted price, shows that institutional players see long-term potential in Solana.
Pantera Capital Bets on Solana’s Long-Term Potential
On Thursday, April 25, Pantera Capital purchased approximately 2,000 Solana (SOL) tokens in the ongoing asset liquidation of the defunct cryptocurrency exchange FTX. According to a Bloomberg report, the purchase sale was higher than the $64 seen at the previous auction, but still lower than Solana’s current price of $145.
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The steep discount in both auctions was due to the substantial four-year vesting period attached to the tokens. This lockup period means that, during that time, sales of the tokens are capped. This design aims to prevent flooding the market with a large volume of tokens which could depress prices.
Coincidentally, this lockup period means that anyone buying the token is betting on its long-term potential. Moreover, holding tokens over a long period involves opportunity costs. Investors forego potential gains from other investment opportunities due to capital being tied up in a single asset.
By committing to hold the tokens for an extended period, Pantera is essentially betting that Solana’s price will at least remain above the purchase price. Moreover, the fact that Pantera was willing to buy these tokens at a price higher than the last price of $64, means that the institutional long-term outlook on Solana has improved.
Pantera’s Investment Could Boost Confidence in Solana
The last notable sale of Solana tokens by FTX administrators was part of a larger liquidation process where roughly two-thirds of a $2.6B stash of Solana tokens were auctioned. This initial sale attracted significant attention, not only because of the volume but also due to the steep discount offered at the time. Pantera Capital, Galaxy Digital, and other major firms were quick to take advantage of that sale price.
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The lockup of these tokens has managed to stabilize Solana for now. Still, the tokens will eventually be released into circulation, creating a surge in supply. The eventual unlocking of these tokens could lead to market oversupply, depressing the price if not met by a rise in demand.
Despite these issues, institutional investors have taken a long-term perspective on Solana. This could also encourage similar confidence among other investors, leading to increased demand as the locked-up tokens hit the market.
On the Flipside
- Solana has recently shown resilience despite network congestion, leading to a staggering 70% transaction failure rate.
- The boosted confidence in Solana is partially due to the ongoing technical updates and ecosystem expansion. Notably, Solana has attracted a large number of DeFi projects and algorithmic traders to its platform.
Why This Matters
Pantera Capital’s investment in Solana tokens from the FTX is a significant endorsement of Solana’s potential. This investment highlights the perceived long-term value of Solana, as seen by institutional players.
Read more about the FTX auction:
FTX Auctions More Solana Tokens: What it Means for SOL
Read more about Solana’s ecosystem expansion:
Solana Apps Become Easier to Build With Subsquid and Neon EVM
