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Solana has cratered more than 94% following a 10% fall on Wednesday and 5% slip on Thursday. Sitting currently at just US$9.44, its price is a far cry from its January 2022 high of just under $180.
The cryptocurrency’s fall and argubaly its initial rise is credited to FTX founder Sam Bankman-Fried who publically supported it. SBF was also involved in an early private sale for Solana and founded decentralised exchange Serum on Solana. Alameda Research also invested in Solana, Serum and of course, FTX.
Now that SBF’s empire has fallen, he appears to be dragging Solana down with him. SOL fell over 51% since the FTX scandal began on 2 November. Comparatively, ETH and BTC dropped 21% and 18% respectively.
However, whilst FTX and Alameda held Solana tokens on their balance sheet, Solana itself has no direct relationship with FTX, and even had limited exposure to the exchange. Its relationship with SBF was even reduced to him being an advocate for the blockchain.
That said, as with any market, it’s sentiment that drives the price of assets, not neceessarily intrinsic value.
Interactive Brokers chief strategist argues such market forces are even worse in crypto. “The general problem with crypto is that its lack of intrinsic value means that values are based on confidence and perceived utility,” he said. “If those suffer in relation to a specific token, then it suffers.”
Crypto Twitter has expectedly weighed in too. “Fundamentals haven’t changed and Solana isn’t FTX!” Highlighted one self titled “blockchain expert.”
Another declared the Solana dream is over. “I am DONE buying DIPS on $SOL The only logical place to buy right now is 3-5$ RANGE We have lost any meaningful support right now and ALAMEDA is dumping on us HARD, probably VCs too Have you notices how SAM is back and SOL is just going down hard? that vegan shit is dumping,” he stated.
Whilst Solana’s FTX link is weak at best, there is little upside for the crypto as it stands. Sadly, with such a strong negative narative and no signs of a positive outlook, SOL might not have seen the bottom just yet. As the final nails are being hammered into SBF/FTX’s coffin, Solana will continue to see downside, and without any upside, the sentiment is hardly encouraging.