Solana (SOL) has experienced a significant drop in value over the last 24 hours, plummeting by more than 6%. The decrease in price comes amid concerns that the bankrupt cryptocurrency exchange FTX might liquidate a hefty portion of its SOL holdings along with other Solana-related digital assets.
FTX, according to the data obtained from Solscan, has amassed a total of $1.5 billion in digital assets on the Solana network. Among these assets, around $1.37 billion consists of various Solana-based altcoins including Wrapped Bitcoin (WBTC), Maps token (MAPS), and Serum (SRM). On the other hand, Solana tokens themselves represent a smaller portion of approximately $128 million.
The possibility of FTX offloading its significant holdings into the market has sparked a wave of unease among investors. Social media platforms have been buzzing with speculation about the potential impact of such a massive sell-off. Some users predict a hard dump for SOL once FTX starts liquidating its holdings, while others are urging for calm, pointing out that the bankruptcy plan restricts the volume of assets that can be sold off at once.
FTX’s proposed liquidation strategy involves appointing Galaxy Digital Capital Management, led by Mike Novogratz, to oversee the sales of its recovered crypto holdings. Under this plan, FTX would only be permitted to sell a maximum of $100 million worth of tokens each week, a limit that could potentially be raised to $200 million on a case-by-case basis.
This strategy is designed to minimize the impact of token sales on the broader market, while still allowing FTX to reimburse its creditors. The plan has yet to receive court approval but is expected to be reviewed by the Delaware Bankruptcy Court on September 13.
As of now, Solana is trading at $17.38, marking an approximately 9% decrease for the week.
