Solana (SOL) Price Drops as Fears of FTX Liquidation Mount

Concerns Mount as FTX May Liquidate Solana Assets

The price of Solana (SOL), one of the popular cryptocurrencies, has taken a hit, dropping over 6% in the last 24 hours. This comes as fears grow that bankrupt crypto exchange FTX might soon liquidate a significant portion of the token and other Solana-affiliated crypto assets.

FTX Estate Holds $1.5 Billion in Solana Assets

According to data from Solscan, it is estimated that the FTX estate holds a combined $1.5 billion in crypto assets on the Solana network. While Solana tokens make up $128 million of this amount, the rest consists of various Solana-based altcoins, including Wrapped Bitcoin (WBTC), Maps token (MAPS), and Serum (SRM), among others.

Market Concerns over Impending Sell-Off

The possibility of liquidators selling off $128 million worth of SOL and hundreds of millions worth of other SOL-affiliated tokens has raised concerns in the market. Many users have taken to social media to express their apprehensions about the potential sell-off, with some suggesting that the SOL price could drop significantly once FTX offloads its holdings.

Restrictions on Token Sale

However, some have urged caution, as the bankruptcy plan includes restrictions on token sales. According to FTX bankruptcy filings, the proposed plan allows the FTX estate to sell a maximum of $100 million worth of tokens each week, with the possibility of raising the limit to $200 million for individual tokens. These limits aim to minimize the impact on the broader market while fulfilling FTX's creditor obligations.

Courts Yet to Approve the Plan

It is important to note that the plan has not yet been approved by the courts. The Delaware Bankruptcy Court is expected to review the proposed plan and other matters related to FTX's token sales on September 13.

FTX's Recovery Efforts

In an April 12 hearing, FTX disclosed that it had recovered approximately $7.3 billion in liquid assets, with $4.8 billion of that total recovered as of November 2022. As of April 12, FTX held a total of $4.3 billion in crypto assets available for stakeholder recovery at market prices.

As of now, Solana is priced at $18.38 per token, marking a nearly 11% decrease for the week.

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