The Aftermath of FTX Bankruptcy on Solana
It’s been a year since the shocking collapse of crypto exchange FTX, and a lot has changed in the crypto world. Most cryptocurrencies have been relatively less volatile since the debacle ended, except for the recent bull run in October. Solana, closely tied to FTX’s Sam Bankman Fried, took a major beating after the collapse but has regained its footing over the past month, finally moving beyond the FTX bankruptcy shadow.
FTX Bankruptcy Impact
FTX filed for bankruptcy in November 2022 after a prolonged period of turmoil that shook the cryptocurrency markets. Sam Bankman-Fried was a major supporter of Solana and backed projects in its ecosystem. Additionally, FTX held a significant amount of Solana in its balance books before its bankruptcy.
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FTX’s Collapse Impact on SOL
As one of the largest holders of Solana’s native token, FTX’s collapse sent SOL reeling. Many investors were concerned that FTX’s issues could spill over into Solana’s ecosystem. The crypto had already dropped more than 87% in November 2022 from its all-time high but plummeted to $11 within days of FTX’s bankruptcy announcement.
Recovery and Recent Movement
SOL found a bottom around $9.98 at the beginning of the year and steadily climbed since then. It spent most of the year trading between $23 and $27 from January to October.
Recent Developments
In mid-October, there was an inflow of money into the industry as Bitcoin surged in anticipation of spot Bitcoin ETF approval in the US. This surge caused Solana to trade at $59.98, marking a 501% increase from its January bottom.
Increase in Value and Recovery Possibilities
Solana’s massive rally has increased the possibility of FTX customers recovering more of their lost money. A US judge has given FTX permission to liquidate its cryptocurrency holdings worth over $3.4 billion, including $1.1 billion in SOL.
Potential for Future Growth
According to crypto analyst Jacob Canfield, Solana could easily trade over $1,000 per coin and take the second spot behind Bitcoin.
Closing Thoughts
It’s remarkable how much things can change in just a year in the world of cryptocurrencies. Despite facing challenges after FTX’s collapse, Solana has made significant strides and shown potential for future growth.
