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Tracing Solana’s impressive recovery since FTX-induced FUD

2min Read

The eighth-largest cryptocurrency Solana has put the ghosts of FTX behind and embarked on a robust recovery path in 2023.

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  • SOL more than doubled in market value on a year-to-date (YTD) basis.
  • Bolstered by big partnerships, SOL’s market depth recovered significantly.

Solana [SOL] was closely connected to FTX’s [FTT] fortunes and the downfall of the crypto exchange last year caused serious ramifications for the former.

However, the eighth-largest crypto asset has put the past behind and embarked on a robust recovery path in 2023. After plunging to historical lows in the days following the collapse, SOL more than doubled in market value on a year-to-date (YTD) basis, per CoinMarketCap.


How much are 1,10,100 SOLs worth today


Solana’s robust recovery

While not directly related to FTX, SOL was widely endorsed by the disgraced co-founder of the exchange Sam Bankman-Fried (SBF). So much so that critics speculated that SBF’s campaigning was partly responsible for the token’s price increase seen earlier.

According to crypto market data provider Kaiko, FTX’s sister company Alameda Research, which was at the center of fiasco, held a considerable amount of SOL tokens on its balance sheet. Apart from SOL, some other small-cap tokens from the Solana ecosystem such as MAPS and SRM also had limited exposure to the hedge fund.

While these less popular assets were yet to recover to their pre-FTX levels, SOL beat the top assets of the market like Ethereum [ETH] and Ripple [XRP] in returns on investment weighed against the risk.

Source: Kaiko

Notably, with a steady rise in value in 2023, SOL’s market depth on exchanges also improved. Moreover, the crypto’s liquidity in native units substantially increased during Q3 2023.

Kaiko’s report attributed the shift in market sentiment to high-profile strategic partnerships like the one forged with payments giant Visa and Shopify. Such collaborations with the who’s who of the traditional finance ecosystem indeed helped in tipping the scales in Solana’ favor.

Having said that, SOL’s recovery was a work in progress. The current market depth remained significantly lower than what it was a year ago.

Source: Kaiko


Realistic or not, here’s SOL’s market cap in BTC terms


SOL faces headwinds

Solana’s biggest test in the coming days could be FTX’s impending liquidation plan. SOL was FTX’s largest holding, with over 71.8 million tokens in the exchange’s custody.

If the entirety of SOL holdings were dumped in the market, the price could fall to lows seen immediately after FTX’s collapse.

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Aniket Verma works as a journalist at AMBCrypto. Contrary to most who are primarily interested in merely tracking price movements of cryptos, his focus is on examining the niche intersection between cryptocurrencies and traditional finance. A so-so Bitcoin maximalist, Aniket has a strong disdain for memecoins and the unfounded frenzy they seem to generate every market season. Coming from a strong engineering background, Aniket previously worked as a Content Manager for TV9 Network. Before his stint over there, he was an Associate Multimedia News Producer at Reuters.
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