( Natural News ) The liquidity crisis affecting cryptocurrency exchange platform FTX has also impacted other major crypto players – including Solana and its token SOL .
Earlier this month, FTX entered a downward spiral that saw the company’s fortunes crumble to almost nothing within the span of days. Binance, a rival crypto exchange, initially offered to buy the company. But less than 48 hours later, the potential deal fell through , causing what little value the market still had for FTX to wither away. (Related: Binance backs out of bailout plan to rescue FTX, causing further turmoil across crypto markets .)
The problem for FTX is the fact that its founder and CEO, Sam Bankman-Fried, has close ties to many other crypto assets, dubbed as “Sam coins.”
Among such coins is Solana’s SOL, which is heavily backed by Alameda Research, a crypto trading firm founded and run by Bankman-Fried. SOL’s value has collapsed since the start of the liquidity crisis. One SOL token is currently worth around $14. On Tuesday, Nov. 8, it was trading at $30 per token . SOL’s remaining value could collapse if FTX’s holdings are liquidated
SOL’s deep ties to FTX have turned it into a proxy for the collapsing company in the eyes of crypto traders. Its value has already nearly vanished from its peak of almost $80 billion in Nov. 2021 to just over $6 billion now. Furthermore, the Solana blockchain has been plagued by a series of mishaps, including hacks and outages.
“I do worry about the impact this will have, given Alameda had large holdings in SOL that could get liquidated,” said crypto entrepreneur Tristan Frizza. SOL is the second-largest holding of Alameda, representing about 10 percent of Solana’s market cap.
“Solana has a rough couple of days ahead of it. The immediate […]
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