$SOL Dumps After FTX Fallout

It has been a crazy week in the crypto space. Due to liquidity concerns, the CEO of Binance, known as “CZ,” announced his intent to purchase Sam Bankman-Fried’s FTX on Tuesday.

On Wednesday, he made a U-turn, citing probes by law enforcement and a few other reasons as the driving forces behind his decision. The FTX token (FTT) suffered an impact from the announcement, falling by 63%. The FTX token was not the only one affected; associated tokens were also in the red.

$SOL is one of the tokens impacted by the drop in the price of $FTT. The price of Solana declined by 42% in the last 24 hours. According to CoinMarketCap it is currently trading at $16.66. This is the lowest price Solana has ever been since March 2021. Indeed, FTX was not the only catalyst for its downfall.

Solana blockchain is known for frequent network outages. The Solana network experienced several network issues in 2022 alone. The most protracted shutdown occurred in September 2021, lasting 17 hours. This continues to be a stumbling block for Solana’s performance because developers cannot rely solely on the network. It is currently experiencing another timeout as a result of Oracle updates.

Sam Bankman-Fried(SBF) had previously shown support for the $SOL token. His trading company, Alameda, participated in a fundraising round for Solana last year. He stated that Solana is the most underrated token “at least as of a month ago,” but stressed that his opinion is “not investment advice.”

Binance’s failed acquisition of FTX is bad news for Solana whales. Many are considering selling their positions, which has caused panic in the crypto community.

The global crypto market has also lost 12% of its total market capitalization, with FTX’s token (FTT) bearing the brunt of the damage. This bear season will likely have a lasting impact.

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