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Solana Price Declines As Market Fears FTX $1.16 Bn SOL Holdings

Pathik Bhattacharya
Pathik Bhattacharya Published on September 12, 2023 07:37 AM

The FTX estate, which is currently in charge of the bankruptcy and restructuring of the once-active crypto exchange, has $1.16 billion in Solana (SOL) and $560 million in Bitcoin (BTC).

Solana Price Declines As Market Fears FTX $1.16 Bn SOL Holdings
Source: Unsplash

The estate of the bankrupt crypto exchange FTX has revealed staggering figures, with approximately $7 billion in assets, including $1.16 billion in Solana (SOL) tokens and $560 million in Bitcoin (BTC). This disclosure emerged in a recent court filing, shedding light on the company's financial standing.

FTX, once a major player in the crypto exchange sphere, faced a series of setbacks. It was thrust into turmoil after CoinDesk's revelations about its financial situation.

Founder Sam Bankman-Fried, now entangled in multiple fraud charges, maintains his innocence, with a trial looming on the horizon. The new CEO, John J. Ray III, has criticized the company's financial controls.

FTX Portfolio Shows Solana Holdings Worth Billions

The company has managed to secure a substantial $1.5 billion in cash, in addition to the $1.1 billion it held in November. Furthermore, it possesses $3.4 billion in crypto assets, valued as of August 31. Among these holdings are over 1,300 lesser-known tokens, potentially less liquid compared to major cryptocurrencies like Bitcoin (BTC) and SOL.

The court filing also highlights payments totalling $2.2 billion in various forms, including cash, crypto, equity, and real estate, made to Bankman-Fried and other executives leading up to the bankruptcy. U.S. law allows for the potential clawback of such payments, potentially augmenting the pool of assets available for distribution to creditors.

Bahamas Properties and Reclaimed Donations

FTX's holdings extend beyond cryptocurrencies. The company holds a substantial portfolio of 38 properties in the Bahamas, estimated to be worth around $200 million. New management is also endeavouring to recover funds that were donated to politicians and charitable organizations, including the Metropolitan Museum of Art in New York.

FTX's Plan to Liquidate Assets and Impact on SOL

In response to the crypto market's recent downturn, there are reports that the defunct exchange FTX is considering liquidating a significant portion of its assets, valued at $3.4 billion, including Solana (SOL) and other cryptocurrencies.

This move could have a noteworthy impact on Solana's value, with approximately 4% of its worth affected in the previous day. However, it's crucial to note that not all SOL assets held by FTX can be immediately sold due to lock-up agreements, a detail that has been overlooked in initial reports. This implies a more complex process in the potential liquidation.

Solana Price Analysis

As per CoinStats, Solana is currently trading at $17.95, down -1.42% in the previous 24 hours, with a market size of $7 billion. It has a circulating supply volume of 557,229,272 SOL coins and a maximum supply volume of 557,229,272 SOL coins, with a 24-hour trading volume of $855M.

sol price chart

Source: CoinStats

The price of SOL plummeted once it was revealed that FTX intended to sell its SOL holding. Even if some of the coins are vested and therefore cannot be traded, the news frightened the market. Traders who had positions in Solana were fast to liquidate, and this was reflected in the price, which fell 10% from the previous week.

With sellers in complete control of the market action, Solana's best hope is to hold at the $17 support level, which is the most significant level at the moment. If that does not arrest the downward trend, the price will most likely return to $15. This level was last seen in June.

solana price chart

Source: TradingView

Conclusion

FTX's financial disclosures and potential asset liquidation present a multifaceted narrative of a once-prominent crypto exchange's rise and fall. The extensive portfolio, spanning cryptocurrencies, real estate, and charitable donations, underscores the complexity of the situation.

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