The fallout of the FTX controversy has been immense, and one of the most impacted tokens has been Solana. With reports of the exposure being vested, the disgraced cryptocurrency exchange platform will have access to millions of SOL for the next six years.
The continued deterioration of the price has threatened the formerly dubbed “Ethereum Killer”. But just how deep does this rabbit hole go? And just how harmful could the side effects of the FTX collapse be on Solana’s price?
Solana Price continues to Suffer
Since FTX and its sister platform, Alameda Research, have plummeted, the entire cryptocurrency market has suffered. It is a natural byproduct of the devastation of one of the biggest entities in the industry. But more so than most, the companies and platforms directly connected to the now-defunct exchange are in dire straights.
There may be none more affected than Solana. A statement released earlier this month stated that FTX and Alameda Research control over 50 million SOL. Moreover, reports note SOL tokens were given to FTX from August 31 to January 7 through a “linear monthly unlock mechanism”.
It is that linear monthly unlock mechanism that maintains most of the SOL tokens as vested. This means that FTX is not yet in control of the coins. The last of the token unlocks is set to happen in 2028; a massive reason why the market has negatively reacted to SOL following FTX’s collapse.
The bankruptcy filings mean that most of FTX’s assets will freeze, including the SOL. Yet, all hope is not lost, with signs earlier this month pointing toward a 20% rebound for the coin. Cointelegraph reported that “SOL/USD could rise toward $18, its range resistance level, in the event of a short-term recovery.”
Still, the 50 million SOL connected to FTX has left the token in flux. Moreover, there is no telling how the market will respond following developments in the FTX situation. Subsequently, a hearing is set for December, where things could continue to unravel for the platform.