IMPORTANT POINTS:
- Solana (SOL) experienced a strong recovery in 2023 after being hit by the FTX crash the previous year.
- The relationship between FTX and SOL has been the subject of controversy, as FTX held a significant amount of SOL tokens on its balance sheet.
- SOL’s recovery has been attributed to strategic partnerships and support from FTX co-founder Sam Bankman-Fried (SBF), although it faces challenges related to FTX’s pending liquidation.
Solana (SOL) has experienced a strong recovery process in 2023 after being affected by the fall of FTX the previous year. Although SOL is not directly linked to FTX, the cryptocurrency’s price received a substantial boost due to the support of the exchange’s co-founder, Sam Bankman-Fried (SBF). Some critics even speculated that SBF’s promotional campaign partly contributed to SOL’s price increase.
According to data provided by Kaiko, FTX’s sister company Alameda Research, which was at the center of the controversy, held a considerable amount of SOL tokens on its balance sheet. In addition to SOL, some other small-cap tokens in the Solana ecosystem, such as MAPS and SRM, also had limited exposure to the hedge fund.
Even though these less popular assets had yet to fully recover to pre-FTX crisis levels, SOL outperformed major market cryptocurrencies such as Ethereum (ETH) and Ripple (XRP) in terms of returns. investment in relation to risk.
SOL’s recovery has been a constantly evolving process, and the current market depth remains significantly lower than a year ago. However, throughout 2023, a steady increase in the value of SOL and an improvement in the liquidity of the cryptocurrency has been observed.
A report from Kaiko notes that this shift in market sentiment has been largely attributed to high-profile strategic partnerships, such as the collaboration with Visa and Shopify. These alliances with prominent players in the traditional financial ecosystem have tipped the balance in Solana’s favor.
Despite this recovery, SOL faces significant challenges in the near future. One of the main obstacles is the pending liquidation plan of FTX, which holds a significant amount of SOL tokens. If these tokens were released onto the market in full, it could cause the price of SOL to drop, even to the levels seen immediately after the FTX crash. This development raises uncertainty about the future of SOL and will require careful management by the cryptocurrency community and investors.
