- FTX receives court authorization to sell its $3.4 billion in crypto holdings, including significant amounts of Bitcoin, Ethereum, and Solana.
- Solana, representing $1.2 billion of FTX’s assets, remains mostly staked and unaffected by potential sales.
FTX’s Liquidation Decision: The Underlying Implications for Solana
The cryptocurrency sphere was recently set abuzz as FTX, a renowned crypto exchange, secured court approval to liquidate a whopping $3.4 billion of its crypto holdings. This portfolio, intriguingly diverse, envelops market stalwarts like Bitcoin (BTC), Ethereum (ETH), and notably, Solana (SOL).
Solana’s Resilient Stance amid FTX’s Liquidation News
Amid concerns of a potential market downturn due to such a colossal sale, many eyes turned towards Solana. A precipitous plunge in its price from $18.50 to $18 within mere minutes post-announcement certainly fanned these apprehensions. However, a crucial fact presents a counter-narrative.
Solana’s significant share, amounting to $1.2 billion of FTX’s assets, is predominantly staked. For the uninitiated, “staking” in the crypto domain means that these assets are locked in a wallet to support network operations like block validation, thus they are not readily accessible for selling. Michaël van de Poppe, a recognized figure in the crypto space, emphasizes this staking scenario, suggesting that a vast majority of Solana‘s holdings within FTX’s ambit are shielded from immediate sale. This inherently buffers Solana against any drastic, real-time price fluctuations.
FTX gets approval to sell $3.4B in #Crypto assets & CPI data comes in worse than expected
Markets aren't falling down that much, and not much should be happening from it.
The Solana, which corresponds to $1.2 billion of the assets of FTX, is mostly staked and can't be sold.👇… pic.twitter.com/uKG9XefCzy
>> Buy Solana quickly and securely with PayPal, credit card or bank transfer at eToro with low fees and deposit protection. Get started with SOL now. Visit Website <<
— Michaël van de Poppe (@CryptoMichNL) September 13, 2023
Adding complexity to this scenario, the recent Consumer Price Index (CPI) data reported a 3.7% headline, a tad higher than the 3.6% expectation, hinting at intensifying inflation. In contrast, the Core CPI matched expectations at 4.3%. Such metrics, while seemingly distant, influence broader market behaviors, potentially damping the impact of individual events like FTX’s asset sale.
In tandem with these developments, Bitcoin continues its battle, consolidating around the $26.1K mark, poised at a potentially decisive resistance point after briefly touching $25K. Observers keenly await if it surpasses the $26.3K threshold, a pivotal indicator for continued bullish momentum.
Interestingly, other assets under FTX’s umbrella, like XRP, Wrapped Bitcoin (WBTC), and Aptos (APT), also lie under the microscope. Their increased liquidity might trigger market apprehensions regarding price stability, exacerbated by potential FUD (Fear, Uncertainty, Doubt). Yet, with Solana standing resilient against such external pressures, the broader market might find some semblance of stability in these turbulent times.
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