Stop the FUD, HEre’s Why FTX Can’t Sell Its Solana Holdings

Over the past weekend, the Solana (SOL) price got here underneath main promoting stress with its value slipping underneath $18.50 ranges not too long ago. It is because Solana buyers have turned anxious that crypto buyers might dump their Solana holdings after the FTX listening to in Delaware Chapter Courtroom on Wednesday, September 13.

Reportedly, FTX is in search of approval for its liquidation of $3.4 billion in SOL, FTT, BTC, ETH, and different crypto asset holdings. Crypto trade FTX held Solana as a significant a part of its reserves. Nevertheless, they offered SOL in enormous portions when the trade crashed final yr in November 2022.

Of the whole $3.04 billion in crypto property held by FTX, Solana constitutes the lion’s share. As of January 17, FTX’s cryptocurrency holdings had been estimated to consist of roughly $685 million in Solana (SOL) tokens, $529 million in FTT tokens, $268 million in Bitcoin (BTC), $90 million in Ethereum (ETH), together with a spread of different property, together with Aptos, Dogecoin, Polygon, XRP, and numerous stablecoins.

Will FTX Actually Promote Solana Holdings?

Nevertheless, many individuals appear to have neglected a major detail. The SOL tokens held by FTX debtors will not be instantly obtainable on the market. In distinction to the impression conveyed by the shared visible knowledge, these SOL tokens are topic to a lockup settlement. FTX, together with Alameda, had beforehand obtained 16% of the SOL provide instantly from the Solana Basis.

This acquisition got here with sure circumstances, primarily a lockup schedule. The present holding of 47.51 million SOL, which represents 8.82% of Solana’s eventual complete provide, is certain by this settlement.

Therefore, the misunderstanding that this SOL reserve is quickly tradable and poised for a market sell-off is basically incorrect. The actual fact is that these tokens are locked and can comply with a linear vesting course of spanning from 2025 to 2028.

In keeping with the phrases of the settlement, the SOL tokens will expertise gradual month-to-month releases till January 2028. Moreover, particular tranches, such because the 7.5 million SOL acquired from Solana Labs by Alameda Analysis, will solely develop into accessible on March 1, 2025. One other tranche of 61,853 SOL is ready for unlocking on Could 17, 2025.

Thus, there’s little purpose for buyers to panic amid all of the FUD round Solana at this level.

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Bhushan is a FinTech fanatic and holds aptitude in understanding monetary markets. His curiosity in economics and finance draw his consideration in the direction of the brand new rising Blockchain Expertise and Cryptocurrency markets. He’s repeatedly in a studying course of and retains himself motivated by sharing his acquired information. In free time he reads thriller fictions novels and typically discover his culinary abilities.

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