Last Friday FTX, one of the largest crypto-exchanges in the world, was hacked. The theft of $400 million put the final point in the crisis of the company, which eventually declared itself bankrupt. There has been a lot of news about this on letizo.com.
Solana (SOL), like the rest of the cryptocurrency market, reacted sharply to the news of the last week: from November 6 to 9, the value of the coin collapsed from $37.08 to $11.5! In doing so, it unexpectedly broke through the $22.7 support level. Even though they corrected to that level on November 10, they continued to plummet the next day (according to TradingView). Can we make a Solana price prediction for 2040?
Market capitalization and trading volumes have not lagged behind the price, which, according to CoinCheckup, have also declined sharply. On the Binance USD token price prediction does not look very optimistic.
FTX: the bankruptcy of titanium
The decline of FTX exchange started on November 2, 2022, when media portal CoinDesk revealed the financial state of Alameda Research, a crypto trading firm controlled by FTX CEO Sam Bankman-Fried (SBF). As it turned out, most of the assets consisted of FTX tokens — FTT. At the same time, their volume was illiquid, which raised questions about the solvency of Alameda Research.
On November 6, the head of Binance, Changpeng Zhao, decided to get rid of FTT, and other players followed him. The price of the token dropped 25 times, and now the price in USD on Binance barely exceeds $1. The recent hack only finished off the crypto exchange.
But how is Solana related to FTX?
Ironically, Alameda Research was one of the biggest investors in Solana, which was the second asset in its portfolio. The amount was more than $1 billion and included $292 million of “locked SOL,” $863 million of “unlocked SOL” and $41 million of “collateral in SOL.” The insolvency of Alameda Research and the resulting collapse of FTX, a crypto-trading firm associated with it, seriously undermined the value of cryptocurrency.
And note the rumors that emerged: Alameda Research tried to save FTT’s liquidity through the sale of SOL. These speculations could very well explain why Solana has dropped in value so much.
Separately, the Sam Bankman-Friede figure is also worth highlighting. If Ilon Musk is behind Dogecoin, then SBF, which participated both in financing Solana Labs and in the creation of Serum’s DeFi-projects liquidity center, became Solana’s main PR man. The cryptocurrency community has already criticized SBF for its endorsement of government regulation of digital assets — recent events have only continued its decline in the eyes of crypto-enthusiasts, which has also led to the decline of Solana.
Serum Protocol
SBF’s miscalculations were only the starting point for SOL’s decline. In fact, they started a chain reaction that affected the entire ecosystem built on the Solana blockchain. Thus, Serum, on which many DeFi projects (Jupiter, Mango Markets, etc.) rely, was under threat. At the moment, Solana developers are trying to launch a Serum hardfork, which would allow them to create a new version of the protocol without being bound to FTX.
Solana price history: Solana outlook
Solana price history forecasts — you can’t argue with that. Not only is the token depreciating, and the ecosystem is losing major partners, but the blockchain has again had a systemic failure (the official reason was given as an update to the price oracles).
Still, it’s too early to talk about the end of SOL. The Solana blockchain is rightly proud of its innovative technologies, which provide the highest throughput among blockchains and make it much more efficient than Bitcoin and Ethereum.Let’s hope that Solana’s developers’ new solutions will attract investors and wash away the black spot from the reputation of the blockchain and the token.