Amid the Crypto Crash November, SAM coins have fallen drastically. Investors are uncertain about the future of all SAM coins, that includes Solana, Serum and a few other coins. On Nov 5, one SOL was trading at 37 USD with a 24h trading volume of 2.1 Billion USD, and with the FTX collapsing, the price dropped drastically to less than 13USD within 5 days. Currently, it is trading at 12.81USD at the time of writing this post. This was nothing but collateral damage caused by the fall of FTX.
A group in the crowd must be wondering why SOL is falling with FTX.
Relation between FTX, SOL and Alameda
Well, the two companies have a close relationship with each other, although it is indirect. Through its child company named Alameda Research, FTX is a major investor in the Solana Project.
In 2021, Solana ICO (Initial Coin Offering) attracted investors to gather funding worth 300 Million USD, and guess what, Alameda Research was one of its major investors.
It was given the possession of a portion of SOL. But unexpectedly, Alameda Research became more of a trading body for FTX than it was assumed.
A theory emerged that stated FTX, with the motive to stabilize FTT, was selling assets and these assets include SOL as well.
The theory emerged due to the allegation on FTX liquidated its capital in an unethical way.
Apart from the above-mentioned interests, the two companies had made other investment collaborations. The link of SOL to FTX and Almeda Research has raised many complications for SOL and turned the face of its graph down and that too very steeply.
Market History of Solana
Solana was launched in 2019 for 1 USD per coin. Tracing back to the data available to the month of August 2020, when SOL witnessed a jump of 205% and touched the mark of 4 USD. It again faced a continuous fall in subsequent months and at the end of 2020, it was priced at 1.15 USD in December 2020.
The next year was the best year in the history of SOL. In its first month, SOL jumped 181% followed by 206% in February, 48% in March and 119% in April and within 4 months, SOL reached 42 USD.
Since then, it has never seen any major fall in 2021 and ended the year with a price of 169 USD. It touched the highest of 259 USD the same year. The monthly trading volume of SOL in December 2021 was 102.88 Million USD.
The coming year began with a fall in its price when it fell below the 100 USD mark which was unseen by the coin in the past few months. Although the trading volumes reached 5.6 Billion USD, the price was lower than it was in 2021. Recently, before the Crypto Crash November, it was at 32 USD in October and now it is trading around 12.81 USD.
The rise and fall of SOL are closely associated with FTX and Alameda Research. The jumps it has seen in January, August and September 2021, were due to Alameda Research as SBF, the CEO of FTX and Alameda invested around 50 Million USD in 3 rounds of funding and hence pumped the price of SOL. Just like the fall, the rise was also an effect of SBF.
But even before that, the first trigger is considered to be the fall in NFT volume from October 2021 to November 2021. SOL was famous in NFT and the gaming ecosystem and the fall in the volume raise the question of whether it still is a valid investment or not. This was the reason why SOL was around 30 USD before the Crypto Crash in November, after seeing a peak of 250 USD.
What caused Negative Sentiments on Solana?
Solana foundation released some official facts on November 14, which mentioned its holdings and investments.
- Solana foundation holds shares of FTX Trading LTD worth 3.24 Million USD.
- It owns 3.43 Million worth of FTT tokens.
- Solana also owns 134.54 Million SRM tokens which also collapsed this November.
These are some facts released by the suffering company itself which turned the public sentiments the other way.
Does Solana (SOL) have any future?
The opinion on the future of the SOL token is a debatable topic among the experts in the community. The two sides are discussing the question of whether the coin will reach new heights in the next cycle or if this is the end of the project. Well, this is definitely a topic to think deeply about.
Since the very beginning, the Solana project has had a great community which is development-oriented and even after its collapse over the past few months, it has been developing various NFT projects, gaming projects and many other projects building on the chain and is expected to reflect the same development in near future. This could turn the graphs the other way and SOL can regain its glory.
For example, the serum tech project, it is built on the Solana network and was not abandoned by the community even after it started to face problems, it was forked by the developers as they mentioned they don’t want to waste a project with such great potential.
Although SOL might not reach its all-time highest of 250 USD, it is not going to fall to 0 as well. It is a widely used layer 1 blockchain that developers are keen to develop on which shows a possibility of some creative change in the project which might take it to some new heights. As many gaming and NFT projects are based in Solana Network and they are not that instantly profitable so the future cannot be predicted precisely.
Many experts are suggesting the current time to be a golden time to accumulate SOL as they are expecting a significant rise in its price but the other side is opposing the same with the fact of the dump of 10-20% of the total supply.
In my opinion, it is not a discussion of whether to buy SOL or not, it is about how much to buy. One should not invest 30% of its portfolio just on Solana as its future is still cloudy and depends on many factors but an investment where SOL has about 3% of the portfolio value may result in good profit in the future because the coin is not gonna be dead anytime soon because of its great community support. So answering the main question, will Solana recover? The answer is, Yes.
It will recover but with time and would not go to its all-time best any time soon.