FTX, the renowned cryptocurrency exchange, has recently shown its bullish interest in Solana (SOL) by investing 5.5 million SOL worth $122 million. This move comes amidst concerns that the defunct exchange may liquidate a significant portion of its SOL holdings, potentially triggering a downward trend.
On October 14th, the blockchain tracking platform Whale Alert reported the transfer of 5.5 million SOL between two unknown wallets. Shortly after, a crypto analyst using the username “ashpool” identified FTX as the responsible party behind this whale transaction.
Analyzing data from gelato.sh, Ashpool revealed that FTX had delegated the aforementioned 5.5 million SOL to Figment, an active validator in the Solana network.
It’s worth noting that the insolvent exchange had obtained court approval in September to liquidate $3.4 billion worth of their crypto assets to pay off creditors.
Solana represents a significant portion of FTX’s crypto assets, with the exchange reportedly holding 55.8 million SOL worth $1.16 billion. However, a majority of these SOL tokens are currently staked, and in September, FTX reportedly had access to 7 million SOL, most of which were sold.
On October 6th, concerns were raised when approximately $212 million worth of SOL, owned by Alameda Research, a defunct trading division of FTX, allegedly went un-staked. These concerns led to fears of a market sell-off by FTX, but the recent move of investing 5.5 million SOL indicates the exchange’s intention to hold onto its SOL investments, which could be seen as a reassuring step for traders worried about liquidation.
Despite its insolvency status, FTX remains a significant player in the Solana ecosystem, owning 10% of the total supply of SOL. In addition to its SOL holdings, FTX also owns other crypto assets, including 20,500 BTC worth $560 million and 112,600 ETH worth $192 million.
Despite the concerns surrounding FTX, SOL has witnessed a 16.06% increase in the past month. Rumors circulated that the defunct exchange may “shut down” the Solana blockchain if it deems it necessary to unwind traders’ long positions. However, these rumors were soon debunked by multiple reports. In fact, Jacob Creech, Head of Developers at Solana, made the community aware of a $400,000 SOL bounty for anyone who finds a “network kill switch.”
At the time of writing, SOL is trading at $21.98, with a 2.34% increase in the last 24 hours. The token’s daily trading volume has also risen by 10.18% and is estimated to be $267.07 million.
In conclusion, while concerns persist regarding FTX’s potential liquidation of SOL, its recent investment of 5.5 million SOL indicates a commitment to maintaining its SOL holdings. This development is seen as a positive step, providing reassurance to traders and mitigating fears of a market sell-off. With SOL experiencing a notable price increase in the past month, it remains to be seen how this situation will unfold in the coming days.
