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SOL Investors Await Price Impact as FTX Solana Sale Winds Down

Last Updated April 24, 2024 5:09 PM
James Morales
Last Updated April 24, 2024 5:09 PM
  • The FTX estate is auctioning off an unknown amount of SOL this week.
  • So far, the estate has liquidated roughly 2 thirds of its SOL holdings.
  • However, most of the tokens are vested until 2025, so SOL’s market price may not have factored in the sales.

Of the 41 million SOL held by FTX when it collapsed in 2022, roughly 2 thirds of have now been sold by the bankrupt estate. 

This week, the estate will auction off yet another cache of tokens. But the cryptocurrency’s market price may not have factored in previous sales yet. 

Price Impact of FTX Sale Unknown

Although SOL accounts for some of FTX’s most valuable assets, most of the firm’s holdings take the form of vested tokens.

As per the terms of Solana’s coin offering, 20% of the vested tokens will be unlocked in March 2025, with the remainder unlocked monthly until 2028. 

This schedule was predetermined before FTX went bust and token unlocking events are a natural part of crypto price cycles. Although they usually create short-term volatility, markets generally price in the increased supply ahead of time. 

In the case of FTX’s SOL, the tokens have been sold at a significant discount. 

For example, in March, Neptune Digital Assets said  it paid 67% below the market rate for nearly 30,000 SOL.

Neptune and other buyers throw an element of uncertainty into the mix. Do they intend to hold the tokens for the long run? Or will they dump them on the market for a quick profit as soon as the vesting period is over?

Potential Buyers Raise Funds for Solana Auction

For its next sale, the FTX estate is holding a blind auction with a Wednesday deadline for bids. The estate has not confirmed how many tokens are up for sale, but with 2 thirds of its SOL holdings already liquidated, it won’t be long before it has disposed of all of them.

As the selloff approaches an end, prospective buyers are scrambling to raise funds before the opportunity is gone forever.

Likely bidders include Figure Markets and Pantera Capital, which have both solicited money from investors to help secure the discounted tokens. 

According to Pantera marketing material reported by Bloomberg, the asset manager is eying the purchase of up to $250 million worth of SOL from FTX. The firm reportedly  won a portion of the March sale alongside Neptune and intends to participate in the April auction too.

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