FTX Dumps $1.9 Billion in SOL Tokens, Unloading Two-Thirds of Holdings to Stem Debt Crisis

The FTX estate liquidated approximately $1.9 billion worth of SOL tokens to offset debts, representing two-thirds of its $2.6 billion SOL holdings. The discounted tokens were locked up, leading to a delay in the sale but garnering interest from buyers like Galaxy Trading, which established a $620 million fund with a 1% management fee.

FTX's $1.9 Billion SOL Fire Sale: Clearing the Decks Amidst Debt Crisis

In a bold move to stem the hemorrhaging of its debt, the FTX estate has offloaded a staggering $1.9 billion worth of SOL tokens, representing approximately two-thirds of its substantial SOL holdings. According to Bloomberg, which cited anonymous sources privy to the matter, the transaction amounted to the sale of up to 30 million SOL, valued at $64 per token.

The discounted price tag reflects the locked-up status of the tokens, rendering them unavailable for immediate sale. However, the allure of the distressed asset class sparked significant buyer interest, delaying the sale and attracting the attention of prominent players such as Galaxy Digital.

Galaxy Trading, a subsidiary of the crypto investment behemoth, established a dedicated $620 million fund to acquire FTX's SOL, demonstrating the belief in the long-term prospects of the embattled blockchain network. The fund incurs a modest management fee of 1%.

The FTX estate remains in possession of an additional 41 million locked-up SOL, estimated to be worth approximately $7.5 billion. As of today at 1 p.m. ET, Solana traded at $174.2, marking a near 7% decline over the preceding 24 hours, according to data from The Block.

Solana's Role in FTX's Downfall and Market Turmoil

Solana, a blockchain renowned for its high throughput and low fees, held a significant position in FTX's digital asset portfolio. In the aftermath of FTX's collapse in November 2022, investors scrambled to secure a piece of the company's Solana holdings.

Neptune Digital, a digital asset firm, reported the purchase of 26,964 SOL at $64 each, totaling $1.73 million. Of this lot, 20% is set to unlock in March 2025. Pantera Capital also established a $250 million fund in March to capitalize on FTX's discounted Solana tokens.

Solana's price plummeted to lows of around $10 following the FTX debacle, but rebounded in early 2024, reaching an all-time high market capitalization of $81 billion in mid-March. The surge was attributed in part to the popularity of memecoins on the Solana network.

CoinGecko Research has hailed Solana as the most popular blockchain of 2023 thus far, underscoring its resilience and the belief in its underlying technology. The blockchain's market capitalization currently stands at $76.9 billion, placing it among the top five largest cryptocurrencies by this metric, as per The Block prices.

Conclusion: Resolving FTX's Legacy and Solana's Future

The FTX estate's SOL sale represents a major step towards clearing its debt obligations and resolving the fallout from the exchange's collapse. While the price of Solana has fluctuated amidst the wider market turmoil, the interest from major players like Galaxy Digital suggests a belief in its long-term potential.

As the FTX estate continues to unwind its complex financial affairs, the fate of its remaining SOL holdings will remain a closely watched development in the cryptocurrency industry. The future of Solana itself will hinge on its ability to navigate the challenges posed by FTX's demise and capitalize on its technological advantages.