- Solana’s price fell 6% amid concerns of FTX’s potential sell-off.
- FTX’s $1.5 billion holdings spark worries of market impact.
- FTX’s bankruptcy plan limits weekly token sales to $100 million.
Solana (SOL) witnessed a sharp 6% drop in its price over the last 24 hours, stoking concerns of a substantial sell-off by the now-defunct crypto exchange FTX. However, it appears unlikely that FTX will liquidate its entire holdings all at once.
Data from Solscan, aggregating the value of publicly available FTX cold storage wallets, reveals that the FTX estate holds approximately $1.5 billion in crypto assets on the Solana network. Interestingly, Solana tokens account for just $128 million of this total.
The bulk of these holdings comprise various Solana-based altcoins. This includes Wrapped Bitcoin (WBTC), Maps token (MAPS), Serum (SRM), and others playfully referred to as ‘Sam coins’ in reference to the former FTX CEO, Sam Bankman-Fried.
However, the prospect of liquidators releasing $128 million worth of SOL and hundreds of millions worth of other SOL-affiliated tokens into the market has left investors wary. Some expressed concerns on social media platforms like TwitterX, predicting a significant SOL price drop.
The FTX collapse and consequently biggest black swan Solana ever endured put SOL at $8
And we're worried about ~$600M that will be sold over the course of the next 5 years?
Some Major L1s have higher inflation than this and no one cares.— gumshoe (@0xGumshoe) September 10, 2023
Yet, the bankruptcy plan outlines restrictions on token sales. FTX’s proposed liquidation plan, filed on August 24, designates Mike Novogratz’s Galaxy Digital Capital Management as the investment manager responsible for overseeing the sale of recovered crypto holdings.
Under this plan, the FTX estate can only sell a maximum of $100 million worth of tokens weekly, with the possibility of raising the limit to $200 million on an individual token basis. These measures aim to minimize the impact of token sales on the broader market while ensuring creditors are compensated.
It’s worth noting that the plan is pending court approval, and discussions concerning FTX token sales and related matters are scheduled for the Delaware Bankruptcy Court on September 13.
In April 2023, FTX revealed that it had recovered approximately $7.3 billion in liquid assets, with $4.8 billion retrieved as of November 2022. Documents from the hearing indicated that FTX held a total of $4.3 billion in crypto assets available for stakeholder recovery at market prices as of April 12.
