Wintermute Withdraws $38M Solana Ahead of Key Token Unlock, Heightening Market Uncertainty

Wintermute's recent withdrawal of over $38 million in Solana (SOL) from Binance has heightened market volatility just ahead of Solana's largest token unlock scheduled for March 1.

Major crypto market maker Wintermute has withdrawn over $38 million in Solana (SOL) from Binance, as per data from Yahoo Finance, ahead of a key token unlock event scheduled for March 1.

The withdrawal comes amid a 7.5% drop in Solana’s price, hitting a three-month low of $155. The market is now keeping a close eye on the upcoming event, which will see around 11.2 million SOL tokens—initially acquired at much lower prices through FTX auctions—being released into the market.

Major players like Galaxy Digital, Pantera Capital, and Figure obtained SOL at around $64 per token, presenting the possibility of these firms selling off their holdings and further driving down the market value.

According to data from IndexBox, the unlock will see over 15 million SOL—valued at around $2.5 billion—enter circulation in the coming months. This is in addition to inflationary pressures that are expected to contribute another $1 billion in SOL.

Analysts have warned that this mass release of tokens, coupled with inflation, could create significant selling pressure, especially considering that these institutions can capitalize on the current market value of the tokens they purchased.

“Institutions paid around $64 for their SOL in FTX auctions. At $150, that's over 15 million * (150-64) = $1.3 billion in 'unrealized profits,'” crypto analyst Artchick.eth highlighted, adding that Galaxy can make up to $3 billion, while Pantera and Figure also stand to gain considerably.

However, the situation is made more complex by the recent Libra meme coin scandal, which saw $107 million being siphoned off, leading to a steep 94% price drop and dampening market confidence.

As the unlock date approaches, the crypto community is watching to see how the introduction of such a large volume of SOL will affect the market dynamics. With the unlock date nearing, investors should be prepared for potential volatility and the possibility of a bearish trend being exacerbated by institutional sell-offs.